Petrol Could Hit Rs1,000 If Pakistan Faces Fuel Shortage

Federal Petroleum Minister Ali Pervaiz Malik has warned that petrol could cost as much as Rs1,000 per litre if Pakistan experiences a fuel shortage, as disruptions to Middle Eastern oil routes continue to put pressure on the country’s supply chain.

Speaking to journalists in Lahore, Malik said Pakistan was not currently facing a petrol shortage, but maintaining the physical availability of fuel remained the government’s immediate priority.

He warned that if a shortage developed, petrol might not even be available at Rs1,000 per litre.

The warning comes as Pakistan seeks alternative sources and shipping routes following disruptions involving the Strait of Hormuz, the Red Sea and Saudi Arabia’s oil infrastructure.

Malik said the government was working through all available channels to secure petroleum supplies and would avoid decisions that could threaten fuel availability.

According to the minister, international oil prices had increased by around 80% since the conflict involving Iran began, while the increase passed on to Pakistani consumers had been limited to around 50%. He also said the government could not predict when the conflict would end and that ensuring uninterrupted fuel supplies remained his primary responsibility.

The supply situation has become more complicated following an attack on Saudi Arabia’s East-West pipeline, which transports crude towards the Red Sea port of Yanbu.

Pakistan had increasingly relied on Yanbu and the UAE’s Fujairah port as alternative supply points after movement through the Strait of Hormuz became severely constrained.

Industry experts said supplies from Fujairah were continuing, but warned that the route alone might not be enough to meet Pakistan’s full requirements if disruptions in other areas continued.

Energy analyst Afiya Malik said Pakistan would therefore need to explore additional crude sources beyond its traditional Gulf suppliers.

Cnergyico Pakistan has already been importing crude from the United States and West Africa over the past year, providing potential alternatives if Middle Eastern supplies become harder to secure.

However, obtaining crude from more distant markets would increase costs. Cnergyico Pakistan Vice Chairman Usama Qureshi said rerouting tankers around the Cape of Good Hope could add about 10 days to voyage times, raising freight, insurance and transportation expenses.

Qureshi said Pakistan had so far not experienced any major disruption in oil supplies, with Gulf shipments continuing despite heightened regional risks.

The immediate supply position also appeared manageable. Farhan Mahmood, head of research at Sherman Securities, said information from the oil industry indicated that Pakistan had booked cargoes through around mid-October, while refineries and oil marketing companies were also maintaining inventories.

He said supply challenges could begin emerging from November if the disruptions continued.

The government has similarly said that September fuel requirements were covered and October planning had been completed, while arrangements for November were being developed.

The risk could increase during winter, when international demand for petroleum products generally rises and Pakistan may face stronger competition for available cargoes.

Mahmood said international crude prices of around $125-$126 per barrel could translate into another Rs14-15 per litre increase in domestic petrol and diesel prices, depending on international price movements and other components of Pakistan’s pricing formula.

A prolonged disruption would also affect areas beyond petrol prices. Pakistan’s freight transport and food supply chains rely heavily on diesel, while domestic refineries require a steady supply of crude to maintain petroleum production.

Higher fuel and transportation costs could therefore put additional pressure on food prices and overall inflation. A more expensive petroleum import bill could also increase the country’s foreign exchange requirements.

Pakistan is consequently considering a wider range of supply options. Industry officials said crude could potentially be sourced from Libya, the United States, West Africa and other markets, while Saudi Aramco was also reportedly considering routing supplies through Sohar in Oman.

Restoring the Saudi Yanbu route could provide another source of relief, although repairs to the damaged East-West pipeline could take several weeks.

The government has also introduced fuel-conservation measures to limit demand during the regional crisis, including restrictions on government fuel consumption and other austerity steps.

Malik’s warning highlights the government’s concern that physical fuel availability could become a more serious issue than price if alternative supplies cannot be secured.

The minister said Pakistan would continue seeking petroleum supplies from all available sources to prevent such a situation.

He also said a Turkish vessel was expected to arrive in Pakistan in October for offshore oil exploration.