Pakistan acknowledged its energy weakness as global crude oil prices rose, and admitted that it did not have “strategic oil reserves like India” to cushion the blow. This statement comes as oil prices rose to $126 per barrel, driven by unrest in the Strait of Hormuz amid ongoing tensions in the Middle East.
Speaking in an interview with Sama TVPakistani Oil Minister Ali Parvez Malik explained the scale of the challenge, saying: “We do not have any strategic oil reserves. We only have commercial reserves.”
He went on to reveal that Islamabad has a stock of crude oil for only “five to seven days”, in contrast, India can tap into much larger reserves “with just one signature”.
A stark comparison with India’s reserves
Contradiction with India has become central to Islamabad’s concerns. India holds an estimated 60 to 70 days of combined strategic and commercial reserves, allowing it to better absorb global shocks, Malik claimed.
He also highlighted broader economic differences, noting that India’s financial strength plays a key role. “India not only has reserves worth 600 Arab dollars, but also maintains strategic reserves,” he said, explaining that this combination helps New Delhi “alleviate this crisis.” He added that India has the fiscal scope to respond, including cutting taxes, as oil prices rise.
Despite ongoing disruptions to global supply chains, petrol and diesel prices in India have remained largely stable. During an inter-ministerial press conference earlier in March, a Petroleum Ministry spokesperson said that the country’s “actual stock cover is about 60 days at the moment,” adding that it also contains about “800,000 tons of LPG.”
Protests and price shocks in Pakistan
Back in Pakistan, the energy crisis has spilled over into the streets. The sharp rise in fuel prices – including a 42.7 percent jump that pushed prices from PKR 321.17 to PKR 458.41 – led to widespread protests and fuel shortages, according to a report by news agency ANI.
Although Prime Minister Shehbaz Sharif later reduced petrol prices by PKR 80 to PKR 378 per litre, the easing did little to fully calm public anger as supply pressures persisted.
Fuel prices stabilized in New Delhi on Saturday $94.77 per liter of gasoline $87.67 per liter diesel
The constraints of the IMF limit policy options
Pakistan’s response was also affected by its commitments to the International Monetary Fund, which Malik said restricted the government’s flexibility. He revealed that Islamabad had to engage in back-channel negotiations to ease the burden on consumers.
Elaborating on the balancing act, Malik said: “Now, with diesel prices rising up to 3-4 times, we have decided to reduce the tax on diesel to zero and shift the entire burden to petrol while protecting motorcyclists by giving them targeted subsidy.” At the same time, he warned against violating IMF commitments, adding that doing so could have led to worse consequences.
These negotiations ultimately helped secure the duty reduction, he said, saying, “We conducted backdoor negotiations with the IMF and convinced them to reduce the duty by Rs 80 per litre.”
