Pakistan is preparing to introduce weekly petroleum price revisions and provide financial compensation to oil marketing companies as disruptions in the Strait of Hormuz continue to strain global energy trade and increase import costs.
According to a report by Dawn, a summary outlining the proposed measures is being submitted to the federal cabinet’s Economic Coordination Committee for urgent approval.
Officials estimate that price differentials have already reached Rs. 45–50 per liter for diesel and Rs. 25–26 per liter for petrol during the first week of the disruption. Authorities warn that the gap could widen further if supply constraints persist.
The proposed shift from the current fortnightly price adjustments to weekly revisions aims to pass on changes in international prices more quickly. This would prevent large financial gaps from building up on the balance sheets of oil companies.
The measures are intended to protect both state-run and private oil firms from mounting financial pressure while ensuring uninterrupted fuel supplies in the domestic market.
Insurance premiums for oil cargoes have surged dramatically, rising from around $30,000 per vessel to nearly $400,000. Freight rates have also jumped to more than $4 million per shipment, compared with about $900,000 before the crisis. Import premiums for petroleum products have widened sharply, further squeezing the margins of oil marketing companies and refiners.
Under the proposed mechanism, the government would compensate companies for extraordinary expenses related to insurance, freight, and higher import premiums. Officials warn that without such support, some companies could reduce imports or even declare force majeure, potentially threatening domestic fuel availability.
Pakistan State Oil has already issued precautionary tenders for petrol and diesel sourced outside traditional Gulf shipping routes. The company is also exploring alternative supply channels through the Red Sea, including potential shipments from Saudi Arabia, to reduce reliance on Gulf shipping lanes.
Authorities say Pakistan currently holds more than 500,000 tons each of petrol and diesel, equivalent to nearly four weeks of supply, but remain concerned about prolonged disruptions in international shipping routes.
The cabinet committee overseeing the issue, chaired by Finance Minister Muhammad Aurangzeb, is reviewing contingency measures to maintain liquidity in fuel markets and secure supply chains amid ongoing volatility in global energy corridors.
