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3 Ways New Oil Revenue Can Help Gwadar and Pakistan

The Middle East and Africa have faced several maladies in the past. Somehow these countries have managed to boost their economy from an emerging economy to now what is known as some of the world’s richest economies. The common reason for most of these economies progressing forward is their robust oil production industries. The development of the oil sector has resulted in a construction boom as well as an economic surge in these nations. Beside this, the proximity of these countries to the ocean is highly advantageous for establishing trade routes. 

Arab countries such as Saudi Arabia and Qatar have been an inspiration to most economies around the world. The investment that the oil industry brought to these countries is huge. In the Gulf countries of the Middle East Asia, construction projects have grown rapidly with the help of investors from the country itself as well as investors from all over the world. The countries saw an immediate reduction in the poverty and some of these managed to get a spot in the fastest growing economies of the world. Oil has always played a major role in the development of communities. What were once known as indigenous communities are now playing a major role in shaping the biggest economic and trade decisions of the world. All this was thanks to the discovery of oil.

The Gwadar region of Pakistan holds a big potential when it comes to oil production. Saudi delegation that visited the country and the Gwadar region in 2018 recognised the huge potential of the area and have come up with plans to set up the world’s third biggest oil refinery in Gwadar. This comes as a major relief to the degrading Pakistani economy and experts from all over the world are seeing this as a major step to restore the debt-ridden economy.

The Gwadar refinery can help save Islamabad 3 billion dollars a year.

“We are working on feasibility studies for the establishment of the oil refinery and petrochemical complex in Gwadar, and will be ready to start by early 2020,” Pakistan’s Minister for Petroleum GhulamSarwar Khan stated in an event.

The oil needs of Pakistan are satisfied by more than 16 billion dollars of imports each year. This sums up to 26 million tonnes of petroleum products. The Gwadar refinery once established, is said to create thousands of job opportunities for the people of Pakistan which will help the economy deal with the lack of jobs that it faces currently. The Pakistan government is also determined to cut the cost of the annual crude imports by up to 3 billion dollars. This will be a major stride for the country to put a curb and reduce the debt that it faces in the international market. The production of oil from the Gwadar refinery per day is estimated at a whopping 300,000 barrels. Currently, Pakistan has 5 major oil refineries which only produce enough to satisfy half of the demand of the people of the country.

The investment from the Saudis will create an atmosphere of goodwill in the region.

The Gwadar Port, which is one of the biggest CPEC projects being built under the supervision of China is already attracting investors. The declaration of the Gwadar Free zone to be tax free for the investors is another master stroke that is helping investors get the determination to come and invest in the region. The Saudi delegation that visited the region this year proposed to build an oil refinery and help the Pakistani economy revive again. A combination of the port and the oil refinery is expected to bring lots of interest from investors all across the world. This will help the locals with jobs and commercial opportunities. Also, the region is being developed as a tourist attraction, thanks to the Arabian Sea to the south. The Pakistani government is also making amendments to provide full security to the investors investing in the region.

“We will ensure complete security for Saudi investments and people working on the project. A detailed security plan has already been chalked up with the help of the security agencies,” Khan, the Petroleum Minister said.

The oil refinery will help Pakistan get an upper hand in the region.

The presence of the third largest oil refinery in its waters will help Pakistan get an upper hand in the region. In addition, the establishment of the Gwadar Free zone will help Pakistan have a major say in the trade dealings with other countries in the region. The Gwadar Free Zone will be a tax free and duty free option for investors to earn huge revenues from their businesses in the Gwadar region.

The perception that Pakistan holds in the world will change once the port and oil refinery are fully operational. The CPEC projects have already seen investment coming from Chinese investors in the sum of millions and this is forecasted to increase in to 2020s. The Baluchistan province will receive a much-needed boost to its economy which will help change lives and other factors that have made the region suffered in the past. The Baluchistan province has an enormous cultural heritage and natural resources that can help Pakistan in its trade dealings with other countries holding a firm upper hand in commerce.

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