Pakistan is considering emergency measures including a weekly revision of petroleum prices, compensation for oil companies and mandatory work-from-home arrangements to keep markets functioning after the closure of the Strait of Hormuz disrupted global oil trade, according to a media report.
A summary proposing these steps is being submitted to the Federal Cabinet’s Economic Coordination Committee (ECC) for urgent approval as fuel prices appear set to surge, the Dawn newspaper reported, citing sources.
Even before the ECC’s decision, the government-owned Pakistan State Oil (PSO), with official approval, has issued two import tenders each for petrol and diesel from sources outside the Strait of Hormuz as a precaution.
The strategic waterway, which connects the Persian Gulf to the Gulf of Oman, handles about a fifth of the world’s oil shipments. The strait was effectively closed after several attacks on ships by Iran in retaliation for joint U.S.-Israeli strikes.
Pakistan currently holds over 500,000 tonnes each of petrol and diesel stocks, sufficient for about 26 and 25 days respectively, the report said. Authorities have also requested Saudi Arabia to route oil supplies through an alternative Red Sea corridor.
Officials said provincial chief secretaries were asked to attend a meeting of a newly formed 18-member cabinet committee on Thursday to monitor petroleum prices. The meeting will consider mandatory work from home in both public and private sectors wherever possible, along with other measures coordinated with provinces.
While petrol imports remain relatively secure, diesel supplies are more vulnerable as Pakistan relies heavily on long-term shipments from Kuwait that pass through the Strait of Hormuz.
More than 20% of global oil cargoes are reportedly stranded inside the strait, worsening the shortage of ships for diesel transport.
Officials said insurance costs for oil shipments have surged from about USD 30,000 to USD 400,000 per vessel, alongside higher import premiums for petroleum products. Freight costs have also jumped sharply, with ship rates rising to more than USD 4 million compared with around USD 900,000 before the crisis.
These escalating costs are difficult for oil marketing companies (OMCs) and refineries to absorb, prompting the government to propose a mechanism through the ECC to cover the additional expenses and keep the supply chain functioning.
Authorities are also planning to shift fuel price revisions from a fortnightly to a weekly basis to prevent large financial gaps for OMCs and the government and to ensure steady fuel supplies.
One official said the price gap had already widened to PKR 45-50 per litre for diesel and around PKR 25-26 for petrol in the first week of the crisis and could rise further in the coming weeks.
Despite complaints from fuel dealers about restricted supplies, the Oil and Gas Regulatory Authority (OGRA) and OMCs have decided to allocate petrol and diesel to retailers based on their eight-month sales track record to prevent disruptions and hoarding.
“Still, there was no shortage of petrol or diesel anywhere in the country,” a senior government official said.
In response to dealers’ concerns that companies were not honouring product orders, OGRA said supply adjustments were temporary and aimed at stabilising distribution.
“This measure is a standard supply management practice aimed at maintaining stability in the distribution system,” the authority said.
The regulator also reassured the public that fuel stocks remained sufficient.
“There is no shortage of petroleum products. Citizens are advised not to pay attention to rumours and to rely only on information issued through official channels,” it said.
