Pakistan's ongoing fuel shortage that has led to worsening power blackouts is weighing on its credit worthiness and hindering its ability to meet key reform targets laid out by the IMF, ratings agency Moody's warned on Monday.
The country is currently in the grip of one of its worst power crises in years due to a shortfall in imported oil, with the situation exacerbated yesterday by an attack on a key powerline in restive Baluchistan province.
Moody's said increasing energy imports without addressing structural issues that create so-called circular debt "will further strain Pakistan's budget and balance of payments, a credit negative".
"Fuel shortages also reflect the strained finances of state-owned distribution companies and the fuel importer, Pakistan State Oil corporation, and are a setback to the sector's progress on reforms."
