Pakistan has sharply increased petrol and diesel prices following the disruption in global oil supply triggered by the ongoing Iran–Israel war. Petrol and high-speed diesel prices have been raised by 55 Pakistani rupees per litre, marking the largest fuel price hike in the country’s history. The decision came after Iran closed the Strait of Hormuz, a strategic waterway through which nearly 20 per cent of the world’s crude oil trade passes. Pakistan’s Petroleum Minister Ali Pervez Malik, Foreign Minister Ishaq Dar, and Finance Minister Muhammad Aurangzeb announced the price hike while assuring the public that the country currently has sufficient petroleum reserves. However, the ministers said the unprecedented increase in fuel prices was necessary due to disruptions in global oil supply and rising crude prices.
With the new revision, the price of high-speed diesel in Pakistan has increased to 335.86 Pakistani rupees per litre, up from the previous price of 280.86 rupees. This represents an increase of roughly 20 percent. Meanwhile, the price of petrol has risen to 321.17 Pakistani rupees per litre, up from 266.17 rupees, marking a 17 per cent increase.
Authorities said the hike was a temporary measure aimed at stabilising the domestic fuel market amid uncertainty in global oil supply chains.
Emergency measures to manage fuel crisis
Pakistan is also considering a number of contingency measures to manage the growing fuel crisis. Among the options being discussed are work-from-home arrangements for employees and shifting schools to online classes to reduce fuel consumption.
However, the government has decided not to implement such drastic measures for the time being. Instead, it has opted to increase fuel prices in order to balance demand and maintain supply.
Officials explained that Pakistan is heavily dependent on crude oil transported through the Strait of Hormuz, and the closure of the route has significantly affected the country’s energy security. The ministers added that the price hike would be withdrawn once international crude oil prices stabilise and supply routes return to normal.
Economic setback and search for alternatives
The steep rise in fuel prices is expected to be a major setback for Pakistan’s already fragile economy. The country is currently grappling with high inflation, currency depreciation, and fiscal pressures. Economists warn that the increase in petrol prices will likely trigger further inflation and higher transportation costs, which could affect businesses, industries, and everyday life. Rising fuel costs typically lead to increased prices for essential goods and services, putting additional pressure on households and companies.
Meanwhile, Saudi Aramco is preparing to supply crude oil through an alternative route via the Red Sea port of Yanbu, bypassing the Strait of Hormuz in the Persian Gulf. The company has reportedly invited several countries to collect crude oil from the Yanbu port. However, it remains unclear how global oil companies will respond to the new supply disruptions.
Saudi Arabia exported around 7.2 million barrels of crude oil per day in February, of which approximately 6.38 million barrels passed through the Strait of Hormuz. The kingdom also operates an East–West pipeline capable of transporting 5 million barrels of crude oil per day from the northern oil fields to the Red Sea coast. Through this pipeline, crude oil can be transported directly to the Yanbu port, where it can be loaded onto tankers and shipped to international markets. However, it is still uncertain whether the port has the capacity to handle such large volumes of crude oil.
Reports also suggest that purchasing crude oil through the Yanbu route could double transportation costs.
Pakistan has already informed Saudi Arabia that it is ready to purchase crude oil through Yanbu. Officials said a ship has already departed to collect crude oil from the port, while two additional shipments are expected to reach Pakistan through alternative routes in the coming days.
India is confident on energy security as Pakistan faces fallout
While India has expressed confidence in its energy security despite the crisis in global oil supply, Pakistan appears to be slipping deeper into economic strain after announcing the largest fuel price hike in its history. The Indian government has stated that the country is well prepared to meet its energy needs even if global supply routes face disruptions. India currently holds more than 250 million barrels of crude oil and petroleum products, equivalent to around 4,000 crore litres, in strategic reserves and refinery storage.
These reserves are stored in underground strategic petroleum facilities in Mangalore, Padur and Visakhapatnam, as well as in refinery tanks across the country. According to officials, the stockpile is sufficient to meet the nation’s energy requirements for seven to eight weeks. Authorities have also indicated that even if the Strait of Hormuz remains closed, India can continue importing crude oil through alternative sources such as Russia, the United States and West Africa. At present, India imports crude oil from nearly 40 countries, giving it a diversified supply network that reduces the risk of severe disruptions. Officials say India is unlikely to face major supply shocks because of long-term oil import agreements with several global suppliers. This resilience, analysts note, is largely the result of the country’s long-term energy diversification strategy. Oil supplies from regions such as Russia, West Africa and the United States are expected to help maintain stable availability.
In contrast, the war has further aggravated Pakistan’s already fragile economic situation. The new fuel prices were announced during an emergency press conference on Friday night by Deputy Prime Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb, and Petroleum Minister Ali Pervez Malik.
Soon after the announcement, long queues stretching for kilometres formed outside fuel stations across several cities as people rushed to fill their vehicles before the revised prices came into effect. Reports also indicated clashes and temporary closures of petrol pumps in some locations.
There were incidents of arguments and scuffles between vehicle owners and fuel pump employees as panic buying intensified. In several areas, petrol stations shut down early in order to prevent fuel stocks from being completely exhausted. Major cities including Lahore, Karachi, Islamabad and Rawalpindi witnessed an unusually large rush at fuel stations. Authorities said the sudden surge in demand caused temporary disruptions at many pumps.
Officials explained that the ongoing conflict has significantly increased shipping and insurance costs for transporting crude oil, making imports far more expensive. Due to these additional costs, several private oil companies have reportedly hesitated to continue importing fuel.
The government maintained that the price hike became unavoidable after private oil firms indicated that continuing imports under the current conditions was no longer economically viable.
