Islamabad — Pakistan has acknowledged a major gap in its energy security after admitting it does not maintain strategic oil reserves to cushion the country from global price shocks. The admission came as international crude jumped to around USD 126 per barrel — the highest since 2022 — amid disruptions in the Strait of Hormuz linked to regional tensions.
Petroleum Minister Musadik Malik said Pakistan only holds commercial stocks equivalent to a few days of crude supply. He estimated crude inventories at roughly five to seven days and said refined-product stocks held by oil marketing companies would last about 20–21 days. Pakistan, he noted, has no dedicated strategic petrol reserve at all.
By contrast, Malik pointed to India’s combined strategic and commercial holdings of an estimated 60–70 days of oil supplies. He said those reserves, along with stronger foreign-exchange buffers and different fiscal room, enable India to respond more easily to price spikes.
The minister also highlighted differences in policy space. India, not constrained by an IMF programme, has been able to adjust duties quickly and reduce taxation to shield consumers and oil companies as global crude climbed from roughly USD 70 to over USD 120 per barrel in recent weeks. Malik said Pakistan’s commitments under its IMF arrangements limited its options when global prices surged.
Faced with rising diesel prices, the government moved to reduce the diesel levy to zero and redirected the fiscal burden onto petrol while designing targeted subsidies to protect motorcyclists. Malik said Islamabad conducted backchannel talks with the IMF and secured a reduction of 80 rupees per litre in the levy as part of those negotiations.
The domestic strain has been evident on the streets. A prior 42.7 percent increase in petrol prices pushed rates from PKR 321.17 to PKR 458.41, triggering protests and supply shortages. In response to public pressure, Prime Minister Shehbaz Sharif later cut petrol prices by PKR 80 to PKR 378 per litre.
The current price spike has been driven in part by disruptions associated with US-Iran tensions. Since late February, Iranian restrictions affecting access to the Strait of Hormuz — the chokepoint through which about one-fifth of global oil and LNG passes — have added to market volatility and pushed prices higher.
While Pakistan scrambles to soften the short-term impact on consumers, analysts say the episode underscores a longer-term vulnerability: without strategic reserves and with limited fiscal flexibility, the country remains exposed to external energy shocks. Policymakers will face pressure to consider how to build buffers and manage future price swings without undermining fiscal health.
