Pakistan is preparing a series of policy measures aimed at protecting domestic fuel supply and maintaining market stability as disruptions around the Strait of Hormuz threaten global oil shipments and raise transportation costs. Government officials are considering steps such as shifting petroleum price revisions to a weekly schedule, compensating oil companies for higher insurance and freight costs, and introducing energy conservation policies that could include mandatory work-from-home arrangements for both public and private sector offices.
According to officials familiar with the discussions, a summary outlining these measures is being submitted to the federal cabinet’s Economic Coordination Committee (ECC) for urgent consideration. The proposal comes as petroleum markets face rising uncertainty due to restricted shipping activity and escalating costs linked to regional tensions around the Strait of Hormuz, one of the world’s most critical maritime routes for oil transportation.
Even before the ECC makes a formal decision, Pakistan State Oil (PSO) has already initiated precautionary steps. With the approval of the government, the state-owned oil marketing company has issued two separate tenders each for petrol and diesel imports through routes that bypass the Strait of Hormuz. The move is intended to diversify supply channels in case the disruption continues or intensifies.
Officials noted that Pakistan currently maintains relatively comfortable petroleum reserves. Stocks of petrol and diesel both exceed 500,000 tonnes, which is sufficient for approximately 26 days of petrol consumption and around 25 days of diesel demand across the country. Despite these reserves, authorities are taking precautionary measures to ensure uninterrupted fuel supply in the coming weeks.
In parallel, Pakistan has approached Saudi Arabia to facilitate oil shipments through an alternative supply route via the Red Sea. Officials believe that diversifying supply channels early could help reduce potential risks associated with prolonged shipping disruptions in the Gulf region.
The government has also called a meeting of an 18-member cabinet committee formed specifically to monitor petroleum prices and supply conditions. Provincial chief secretaries have been directed to attend the meeting to ensure coordination between federal and provincial authorities. Among the proposals expected to be discussed is the possibility of introducing work-from-home arrangements wherever feasible in both government and private offices as part of a broader energy conservation plan.
While petrol imports remain relatively secure, officials warned that diesel supply is more vulnerable to disruptions. Pakistan relies heavily on long-term diesel supply agreements with Kuwait, most of which are handled by Pakistan State Oil. These shipments typically pass through the Strait of Hormuz, making them particularly exposed to the current shipping challenges.
The situation has also been complicated by rising shipping and insurance costs. According to officials, the insurance premium for a single oil cargo vessel has increased sharply from roughly $30,000 to nearly $400,000. At the same time, import premiums for petroleum products have increased beyond the $3-5 per barrel range that PSO had secured earlier this year for shipments booked in February.
Freight costs have also escalated significantly. Chartering an oil tanker that previously cost around $900,000 is now estimated to exceed $4 million due to reduced vessel availability and heightened risk in the shipping corridor.
Officials indicated that the combined effect of these rising costs could place heavy financial pressure on oil marketing companies (OMCs) and refineries operating in Pakistan. Without a compensation framework, companies might find it difficult to absorb the additional expenses, which could disrupt fuel imports and supply chains. For this reason, the government is considering a mechanism that would reimburse OMCs for extraordinary costs while ensuring the continued availability of petroleum products at retail outlets.
Another key proposal under review is the shift from the current fortnightly petroleum price adjustment to a weekly revision cycle. Policymakers believe this approach could reduce financial pressure on both the government and fuel importers by allowing fuel prices to reflect real-time global market changes more quickly.
Officials estimate that the price gap caused by rising international costs has already reached approximately Rs45 to Rs50 per litre for diesel and around Rs25 to Rs26 per litre for petrol during the first week of the crisis. If the disruption continues, this gap could widen further in the coming weeks.
At the same time, the Oil and Gas Regulatory Authority (Ogra) and oil marketing companies have introduced temporary supply management measures to prevent hoarding and ensure fair distribution. Fuel supplies to retail outlets are now being allocated based on each dealer’s average sales over the past eight months rather than allowing unlimited orders.
Despite complaints from some fuel dealers about limited supplies, government officials maintain that there is currently no shortage of petrol or diesel anywhere in the country. Ogra has also confirmed that regulating supplies based on historical sales patterns is a standard practice during periods of extreme price volatility.
Meanwhile, Finance Minister Muhammad Aurangzeb chaired a meeting of the cabinet committee responsible for monitoring petroleum prices and supply chains. The session reviewed national fuel reserves, consumption patterns, and supply logistics for petrol, diesel, aviation fuel, and liquefied petroleum gas.
Participants were also briefed on developments in international oil markets, including benchmark price movements, freight rates, insurance costs, and evolving shipping routes. The committee acknowledged that the global energy environment remains uncertain, particularly because of the ongoing instability surrounding the Strait of Hormuz.
Discussions also covered developments in liquefied natural gas (LNG) and LPG markets, as disruptions in maritime routes could affect regional fuel logistics. Officials confirmed that Pakistan continues to monitor cross-border LPG inflows and long-term LNG import contracts to ensure uninterrupted energy supply.
The committee also reviewed contingency strategies such as exploring additional procurement routes through regional energy hubs and expanding partnerships with international suppliers. Options under consideration include increased use of ports in the Red Sea and other Gulf region facilities to maintain refinery operations and secure stable fuel flows.
The finance minister emphasized that maintaining uninterrupted fuel availability remains the government’s top priority. Authorities also directed relevant agencies to strengthen monitoring to prevent hoarding, diversion, or smuggling of petroleum products during the period of global market volatility.
Provincial chief secretaries are expected to join the committee’s next meeting to finalize a national action plan. The government aims to implement a coordinated strategy involving federal institutions, provincial administrations, and energy sector stakeholders to ensure Pakistan’s fuel supply remains stable despite global disruptions.
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