Govt to hold fuel prices, despite global spike
• Bans export of all petroleum products to secure domestic supply
• ‘Emergency’ budget allocation of Rs389bn may be tapped to absorb shock
• PM, military leadership decide against immediate price hike
• Gas supplies to fertiliser plants curtailed; rationing may be revived after Eid
• Current petrol, diesel stocks ‘sufficient for about 22 to 23 days’
ISLAMABAD: The government has banned the export of all petroleum products and is considering holding back any immediate increase in petroleum prices, despite continued upward movement in the global market.
Instead, it plans to draw on a Rs389 billion ‘emergency fund’, allocated in the budget for contingencies, to absorb future price shocks.
The latest estimates as of March 12, based on existing tax rates and the pricing formula, suggest that the price of high-speed diesel (HSD) could rise by another Rs56 per litre, and petrol by Rs41 per litre. Petrol and HSD are currently being sold at around Rs322 and Rs337 per litre, respectively.
Kerosene and light diesel oil prices are also estimated to increase by Rs7 and Rs53 per litre.
The next price review is scheduled for Sunday (March 15), but ministers indicated that it could be brought forward to Friday (today).
Highly placed official sources told Dawn that Prime Minister Shehbaz Sharif informed a recent consultative session attended by federal and provincial representatives that he and the military leadership had jointly decided after the first Rs55 per litre increase that there would be no further price hike in the near future, regardless of developments in the Middle East.
The premier told the session, also attended by Chief of Defence Forces Field Marshal Asim Munir, that the government would use block al__cpLocations for emergencies to absorb further price hikes.
According to sources, the prime minister said that no other emergency could be worse than the situation currently faced by the nation due to fuel supply disruptions following the US-Israel attack on Iran and its aftermath.
However, sources said cabinet members remain divided, with elected ministers supporting the prime minister’s stance while technocrats, particularly those dealing with the International Monetary Fund (IMF), oppose disturbing the pricing buffers currently in place.
The issue also surfaced during a meeting of the Senate Standing Committee on Finance, where Petroleum Minister Ali Pervez Malik said efforts were being made to manage petroleum prices under the prime minister’s directives and that a final decision would be made after reviewing global prices on Friday.
Minister of State for Finance and Railways Bilal Azhar Kiyani told the meeting that while prices would be reviewed on Friday, the government would make every effort not to further burden the public despite rising international prices. “The prime minister has directed that burden should not be passed on to the people,” he said.
Both ministers defended the March 7 decision to increase prices by Rs55 per litre, saying the move helped prevent panic buying and supply disruptions similar to those reported in Bangladesh and India despite heavy subsidies. Finance Minister Muhammad Aurangzeb added that international oil prices were still going up.
Benchmarks
It should be noted that benchmark Brent crude prices, often cited in public discourse, do not directly determine Pakistan’s retail fuel prices.
Pakistan imports more than 95 per cent of its oil from the Middle East, with most shipments passing through the Strait of Hormuz. Pricing is largely linked to Dubai-based benchmarks, which currently stand at about $135 per barrel compared to around $105-106 for Brent.
Petrol and diesel are imported separately and their current ex-Dubai prices stand at about $120 and $168 per barrel, respectively.
Sources told Dawn that the government has also barred oil refineries from exporting furnace oil and naphtha to maintain buffers for power generation after Qatar suspended LNG supplies last week, declaring force majeure following Iranian attacks on its processing facilities. Gas supplies to fertiliser plants are also being curtailed, while gas rationing may be revived after Eidul Fitr to minimise electricity load-shedding as temperatures rise, and to conserve foreign exchange reserves.
Officials said current petrol and diesel stocks were sufficient for about 22 to 23 days, though diesel supplies could face pressure as imports from alternative sources require more than 20 days of transit.
Saudi Arabia is reportedly extending support and could supply crude oil to enable local refineries to maximise diesel production.
However, freight rates for very large crude carriers have jumped around 15 times and such vessels cannot dock directly at Pakistani ports, instead anchoring near Oman, from where smaller feeder ships transport crude to local ports.
On the positive side, liquefied petroleum gas (LPG) supplies through informal channels from Iran have nearly doubled since the conflict began, reportedly due to increased cash needs across the border and disruptions in formal supply routes.
Published in Dawn, March 13th, 2026