The federal government dropped a fuel bomb on Friday night and increased the price of petrol and high-speed diesel by Rs55 per litre as the ...
The federal government dropped a fuel bomb on Friday night and increased the price of petrol and high-speed diesel by Rs55 per litre as the raging conflict in the Middle East grinds on and chokes supply lines. Regional tensions escalated sharply after air strikes by the United States and Israel last week killed Ayatollah Ali Khamenei, Iran’s Supreme Leader, along with several senior officials. The strikes triggered retaliatory actions by Iran, widening the conflict across the region. In response, Iran launched attacks on US military bases in several Gulf countries, significantly expanding the confrontation. Iran has also closed the Strait of Hormuz, halting the movement of oil supplies to many countries. As a result, crude oil prices were set on Friday for their strongest weekly gain since the extreme volatility seen during the COVID-19 pandemic in spring 2020, with shipping and energy exports through the key waterway disrupted. Amid the unfolding crisis, Pakistan is also facing pressure as much of its energy supply depends on international imports. The government has therefore begun reviewing its strategy as the situation in the region shows no immediate signs of easing. Deputy Prime Minister and Foreign Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb and Petroleum Minister Ali Pervaiz Malik addressed the press conference. Malik announced the price increase and said they would be reviewed on a weekly basis. Praising the Prime Minister for his efforts and guidance to the petroleum ministry, he said there is no doubt that while the country is currently facing ordinary circumstances, the fire that began in a neighbouring country has now engulfed the entire region. “The fundamental issue we face is that we do not know how long this crisis will persist,” Malik said. However, he added that as the situation was developing, the government had built its reserves to a comfortable level, which is perhaps why no immediate crisis is apparent at present. The minister further stated that since there is no clear end date to this crisis, “I believe we all, as a state, a government, and a nation, have a significant responsibility to manage the system proactively. As far as our reserves allow, we should utilise them to the fullest extent, and in this, price-setting plays a crucial role.” FM Dar said the government had remained in continuous engagement with all relevant ministries and energy-sector stakeholders throughout the day in an effort to reduce the burden on the public. He said that the situation in the Middle East has seen no respite. Over the past week, he said his counterparts had held dozens of calls with him. Dar said Pakistan remained in active contact with Central Asian states and all countries in the Middle East. “Pakistan is making every effort, in coordination with its partners, to de-escalate the conflict that is currently underway and to bring under control what has virtually become a war situation,” he added, noting that how long this process will take was known only to God. Aurangzeb said the country was currently in a stable position in terms of macroeconomic indicators, adding that "our reserves place us on a solid footing." However, he added that “hope is not a strategy”, emphasising that the entire government must come together to undertake scenario planning and analysis. “The whole of government must adopt a proactive approach in this regard,” he said. In a statement before the press conference, Adviser to the Khyber-Pakhtunkhwa Chief Minister on Finance Muzammil Aslam commented on the anticipated increase in petroleum product prices and described the current situation as requiring “extraordinary measures for extraordinary circumstances”. Aslam expressed hope that the government would balance the impact of price hikes and not pass the full burden onto consumers. “Already, people’s budgets are very limited,” he noted. He criticised the handling of the ongoing petrol crisis, stating that it had once again been “poorly managed”, while highlighting that long queues at petrol pumps were observed recently during Iftar time. Aslam claimed that the congestion at petrol pumps was not due to an actual shortage but largely fuelled by rumours and speculation about price increases. Earlier today, the government directed provincial authorities to launch strict action against hoarders of petroleum products and ensure uninterrupted fuel supply, while confirming that adequate reserves were available to meet the country’s needs. Officials informed a high-level meeting's members that Pakistan currently had sufficient stocks of petroleum products to fulfil domestic requirements despite the evolving regional situation. On Thursday, Malik warned of a possible gas crisis after saying that QatarEnergy had issued Pakistan a force majeure notice due to the ongoing war situation, forcing the country to explore alternative arrangements. Speaking in an interview with a private news outlet, the minister said the circumstances were extraordinary as a regional war had broken out affecting several countries. “There are some choke points in our energy supply chain, such as the Strait of Hormuz, which is being fully congested and blocked by Iran, disrupting supplies,” he said. Malik said it was not yet clear when the crisis would end, but indications suggested that it could last “weeks, not days”, meaning existing reserves would need to be stretched as much as possible. Given the uncertain situation, the minister stressed the need for demand curtailment and said decisions would be taken after the prime minister reviewed all proposals. He added that the government might consider measures similar to those adopted during the COVID-19 pandemic, such as encouraging work-from-home arrangements and discouraging physical meetings or intercity travel.
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