The federal government of Pakistan is actively exploring a range of austerity strategies aimed at conserving fuel in response to ongoing disruptions in oil supplies from the Middle East. These disruptions have been triggered by recent military strikes involving Israel and the United States targeting Iran, a key player in the region’s energy exports. As a result, the government is considering practical steps such as imposing speed limits on vehicles to reduce fuel consumption across the country.
Federal Minister for Petroleum, Ali Pervaiz Malik, outlined the government’s comprehensive approach during a televised discussion. He emphasized that the plan focuses on two main pillars: conservation and behavioral change. The first aspect involves encouraging citizens to adopt energy-saving habits and adjust their daily routines to minimize their overall energy footprint. This reflects a broader effort to promote sustainable consumption patterns amid the current crisis.
Malik further revealed that extensive consultations have been conducted with all provincial governments to ensure a coordinated response. The federal government is expected to soon unveil a detailed package of measures aimed at reducing fuel usage. Among these, the introduction of speed limits on roads is being seriously considered, given the direct correlation between vehicle speed and fuel consumption. Slower speeds can significantly decrease the amount of fuel burned, thereby easing pressure on the national fuel supply.
It is worth noting that Pakistan has previously implemented similar conservation measures during the COVID-19 pandemic. These included widespread adoption of work-from-home policies and shifting educational activities to online platforms, which collectively helped reduce energy demand. The current strategy appears to draw on those experiences as a model for managing the fuel shortage.
In addition to these conservation efforts, the government has already raised petrol and diesel prices substantially to reflect the rising costs of global oil markets, which have been destabilized by escalating tensions in the Middle East. Petrol prices have increased by Rs55 per litre, now standing at Rs321.17 per litre, while diesel prices have surged from Rs275.70 to Rs335.86 per litre. These hikes are intended to discourage excessive fuel consumption and help balance the country’s energy budget.
Meanwhile, there have been calls from various sectors within Pakistan to consider importing crude oil from Russia, especially after Iran’s effective blockade of shipping routes through the Strait of Hormuz, a critical passage for nearly 20 percent of the world’s oil supply. However, Minister Malik explained why this option is not currently feasible. He pointed out that Russian Urals crude is a heavy type of oil, which poses significant challenges for Pakistan’s existing refinery infrastructure.
Most of Pakistan’s refineries are older hydroskimming facilities, with the exception of the Pak-Arab Refinery Company (PARCO). These older refineries are not equipped to efficiently process heavy crude oil like Russian Urals. Instead, refining such crude produces a large quantity of furnace oil, a fuel type that is heavily taxed under the International Monetary Fund’s Resilience and Sustainability Facility (RSF) due to its high pollution levels. This carbon levy makes importing Russian crude economically unviable under current conditions.
Minister Malik also highlighted ongoing discussions with the IMF to seek relief from these levies. Pakistan has requested the removal of fuel-related charges under both the RSF and the Extended Fund Facility (EFF) to enable the use of alternative fuel sources domestically. This move is part of a broader strategy to address the country’s persistent gas shortages and energy supply challenges.
Adding to the complexity, LNG supplies from Qatar have recently been suspended, further straining Pakistan’s energy resources. To compensate, the government is exploring the option of generating electricity using furnace oil despite its environmental drawbacks. This situation underscores why importing Russian crude remains commercially impractical, given the limitations of Pakistan’s refinery capabilities and the current regulatory environment.
In summary, Pakistan’s government is navigating a difficult energy landscape shaped by geopolitical tensions and supply chain disruptions. By considering measures such as speed limits, lifestyle modifications, and price adjustments, authorities aim to mitigate the impact on consumers and the economy. At the same time, they continue to engage with international partners to find sustainable solutions that balance economic viability with environmental responsibilities.
