ISLAMABAD:
Amid tensions in the Gulf region, the government has planned to import oil through the Red Sea from Saudi Arabia and the United Arab Emirates (UAE) due to the closure of the Strait of Hormuz, while adopting a weekly oil price review mechanism.
Sources told The Express PAkGazette that the government is currently working on several measures to ensure uninterrupted supply of oil amid the war between Iran, the United States and Israel.
Pakistan imports around one million barrels of oil monthly, with Saudi Arabia being a key oil exporter to the country. The United Arab Emirates also exports oil to Pakistan.
Sources said UAE-based ADNOC and Saudi Aramco will supply oil to Pakistan bypassing the Strait of Hormuz. One refinery has already imported some shipments through the Red Sea. A couple of oil tankers have arrived in Pakistan, while others are on their way.
As another measure, the government plans to change the oil price review from the current fortnightly system to a weekly review. The objective is to discourage hoarding of petroleum products by traders.
Sources said the government had projected a possible increase of Rs 50 per liter in oil prices following the recent war in the Gulf region.
The United States has been pressuring India to stop oil imports from Russia. After the war, India was reported to have taken oil shipments from Russia in bulk to ensure fuel supplies across the Red Sea. Pakistan now also plans to receive supplies from Saudi Arabia and the United Arab Emirates through the same route.
They added that Pakistan National Transport Corporation’s oil cargo ships were put on standby to transport supplies from Saudi Arabia and the United Arab Emirates.
The Oil and Gas Regulatory Authority (OGRA) has already ensured high oil stocks to meet the country’s 28-day requirement following preventive imports of surplus fuel.
Due to the war between Iran, the United States and Israel, two shipments of crude oil were stranded after the closure of the Strait of Hormuz. The strait is 33 kilometers (21 miles) wide and serves as a vital shipping route through which nearly a fifth of the world’s total oil consumption passes.
Last year, on average, more than 20 million barrels of crude oil, condensate and fuel were transported through the strait daily. OPEC members such as Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq use this route to export most of their crude oil, mainly to Asia.
“However, we have managed sufficient stocks of petrol and diesel to meet the country’s needs,” sources told The Express PAkGazette, adding that Pakistan currently has 28 days’ stock of both products.
Officials said the regulator had already predicted in January that tensions in the Middle East could escalate into a war between Iran, the United States and Israel. “Therefore, we secured oil reserves for more than 25 days in January and 28 days in February by importing surplus fuel.”
However, experts warned that the entire world could face an oil crisis if the war continues for a week. “Our two cargoes of crude oil have been stuck due to the closure of the Strait of Hormuz,” a source said, adding that the remaining imports were planned for later.
The Petroleum Division had earlier directed OGRA to ensure adequate stocks of crude oil and petroleum products (MS, HSD and LPG) to avoid supply disruptions. Imports were also ordered to be closely monitored to ensure their timely delivery due to the emerging security situation in the Gulf.
