Tensions between Iran, the United States, and Israel in the Middle East have raised serious concerns about fuel prices and energy security in Pakistan. Industry experts warn that if the conflict escalates or continues for an extended period, the country’s energy supply chain could face significant disruption, potentially pushing petrol and diesel prices sharply upward.
Potential Price Hikes
According to officials in the oil sector, international diesel prices have surged by approximately 30% in the past two days, while crude oil prices have increased by 12–13%. Based solely on this two-day increase, domestic diesel prices could rise by PKR 40–50 per liter, and petrol prices could go up by around PKR 25 per liter. These figures highlight the immediate risk to consumers if the situation in the Middle East persists.
Risks to Energy Supply
Beyond rising costs, experts warn of potential shortages that could severely impact the energy supply chain. Nearly all of Pakistan’s crude oil and diesel imports pass through the Strait of Hormuz. Any military escalation or blockade in the region could disrupt this critical supply route, leaving Pakistan highly vulnerable.
Israel Launches Pre-Emptive Strike on Iran, Multiple Explosions Reported in Tehran
In response, the government has asked Pakistan State Oil (PSO) to explore alternative sources for crude oil and diesel imports to mitigate potential disruptions.
Strategic Petroleum Reserve: An Urgent Need
Officials stress that the current situation underscores the urgent need for a strategic petroleum reserve (SPR) in Pakistan. Despite heavy dependence on imported oil, Pakistan remains one of the few major oil-importing countries without a functional strategic reserve. Over the years, both local and international consultants have conducted studies, prepared detailed reports, and outlined roadmaps for establishing such reserves, but implementation has not yet taken place. As a result, the country’s energy security remains exposed to external shocks, supply disruptions, and price volatility.
Commercial vs. Strategic Reserves
Currently, Pakistan maintains around 25 days of petroleum product stocks as commercial reserves. In contrast, strategic reserves are typically managed by the government or state agencies, involve significant costs, and primarily consist of crude oil rather than refined products. Experts emphasize that in today’s uncertain global environment, delaying the establishment of a strategic reserve is not merely an administrative gap but a major national vulnerability. Immediate action is necessary to safeguard the country’s energy security.
Key Takeaway: If tensions in the Middle East continue, Pakistan could face both price surges and supply disruptions. Establishing a strategic petroleum reserve is critical to protecting the nation from external shocks and ensuring long-term energy stability.
