Govt plans fuel contingency measures amid Iran crisis
• Petrol price may jump by Rs25, diesel Rs45-50 per litre
• New body meets today to consider fuel-saving measures like ‘work from home’ policy
• Aurangzeb claims ‘no emergency situation’, fuel rationing not on the cards
• PSO launches fuel import tenders outside Strait of Hormuz
• Pakistan asks Saudi Arabia to consider alternative oil supply route
ISLAMABAD: Pakistan is set to take a series of contingency measures to secure fuel supplies amid uncertainty surrounding the Strait of Hormuz, including weekly petroleum price revisions, compensations to oil companies for elevated insurance costs, import premiums and freight charges and fuel conservation measures like mandatory work from home, while officials maintain that the country currently has adequate stocks and no immediate shortage.
An immediate summary is being submitted to the Economic Coordination Committee (ECC) of the cabinet in this regard for action without delay as petroleum prices appeared set to surge — about Rs25 per litre for petrol and between Rs45-50 per litre for high-speed diesel, so far — and it is feared that unscrupulous elements may try to take advantage of price gain through hoarding and black marketing, informed sources told Dawn.
But even before the ECC takes these decisions, the state-run Pakistan State Oil (PSO), with government consent, has launched two import tenders each for petrol and diesel outside the Strait of Hormuz as a precaution, although both product stocks are among the highest in the country at present.
Both petrol and diesel have over 500,000 tonnes of stocks, enough for about 25 to 26 days. Saudi Arabia has already been requested to provide oil supplies through the alternative Red Sea route.
Officials said the Centre had directed all the provincial chief secretaries to attend the meeting of the newly created 18-member cabinet committee on the oil situation under the finance minister on Thursday (today) to consider mandatory work from home wherever possible across Pakistan, both in public and private sectors. The meeting could consider other measures as well with the coordination of provinces.
While petrol imports continue to be in a safe zone, diesel imports are not, as Pakistan heavily relies on long-term supplies from Kuwait with PSO, and all those cargoes have to move through the troubled Strait of Hormuz. Additionally, more than 20 per cent of global oil cargoes are reported stuck inside the strait, creating a shortage of ships for diesel.
Officials said the insurance costs have surged from around $30,000 to $400,000 per ship and so are the import premiums for petroleum products.
As a result, freight costs have also surged, with a ship rate going beyond $4 million compared to no more than $900,000 before the crisis. The combination of these three factors is exponential and could not be expected of the oil marketing companies (OMCs) and refineries to absorb. Unless properly compensated, the OMCs would have sufficient grounds to avoid imports and declare force majeure.
Therefore, a summary to the ECC would provide a mechanism for payment of these additional exigencies to keep the OMCs afloat and, in return, maintain their supply chain down to the retail stage liquid.
The fortnightly price revision is also being shifted to a weekly basis immediately to avoid a fiscal bulge on OMCs and the government by recovering the true costs of fuel supplies from consumers on a continuous basis and ensuring smooth supplies as well.
Earlier, on Wednesday morning, Pakistan formally requested that Saudi Arabia provide an alternative oil supply route through Yanbu to maintain its fuel supply chain in the wake of the closure of the Strait of Hormuz following the US-Israel attack on Iran last week.
The request was made by Petroleum Minister Ali Pervaiz Malik to the Saudi ambassador to Pakistan, Nawaf bin Said Al-Malki, during a meeting.
The Saudi ambassador assured full support in this regard, according to a statement by the petroleum division. He highlighted that Saudi Arabian sources had assured security of supplies through the port of Yanbu on the Red Sea, which could help meet energy requirements.
Meanwhile, the Finance Minister Muhammad Aurangzeb-led committee formed by the prime minister to monitor petrol prices in the wake of the emerging situation in the region continued its deliberations on the evolving regional and global energy situation and undertook a detailed review of petroleum stock levels and supply chains across the country.
Participants were briefed on country stock levels of crude oil and refined petroleum products, including petrol, diesel, aviation fuels and LPG, along with their respective days of cover and daily consumption patterns.
Participants reviewed developments in LNG and LPG markets as well. The committee was informed that while LNG imports under long-term arrangements remain an important component of Pakistan’s energy supply mix, disruptions in regional shipping routes could affect global LNG logistics. LPG inflows through cross-border channels are also being closely monitored to ensure uninterrupted domestic availability.
‘No emergency situation’
Separately, briefing the Senate Standing Committee on Finance on Wednesday, Finance Minister Muhammad Aurangzeb cautioned that global uncertainty could affect oil supplies but said there was no emergency-like situation in Pakistan. He suggested conservation of fuel by all sectors as a preventive measure.
“We are not going for rationing of fuel as there is no fuel shortage in the country, but the situation could become serious if the war drags on,” Mr Aurangzeb said in response to a query by committee chairman Senator Saleem Mandviwala.
The committee was informed that the country currently had around 28 days of petrol and diesel stocks, about 10 days of crude oil stocks and around 15 days of LPG and LNG supplies.
The finance minister noted that some cargoes had been delayed in Qatar, but local gas production was being enhanced to offset the shortfall. He added that the finance ministry would hold daily meetings with relevant departments to monitor the country’s fuel position and international price movements.
State Bank Governor Jameel Ahmad told the committee that global oil prices could rise to $100 per barrel, potentially increasing pressure on Pakistan’s external sector. Energy imports account for a significant share of the country’s annual import bill.
He said Pakistan’s foreign exchange reserves had reached more than $16 billion and were expected to increase to about $18bn by June and around $20bn by December 2026. He emphasised that the reserves were not accumulated through additional borrowing.
He said inflation during the current fiscal year was projected to remain between 5pc and 7pc, although regional tensions and rising energy prices could influence inflation trends and the country’s import bill in the coming months.
In a separate development, the Oil and Gas Development Company (OGDCL) is preparing to raise output for the first time in recent years amid the Middle East crisis, its managing director said, according to Reuters.
The company also plans to boost crude oil production by 14pc to 40,000 barrels per day, as the conflict has disrupted shipping through the crucial Strait of Hormuz.
OGDCL’s Managing Director Ahmed Lak emphasised potential further increases with new discoveries. “This potential can be fully monetised subject to offtake by the buyers,” he said.
Kalbe Ali in Islamabad also contributed to this report
Published in Dawn, March 5th, 2026