Pakistan Energy Crisis: Petrol Hits PKR 384, Govt Weighs Measures As Gulf Disruptions Bite

Pakistan is facing a widening energy crunch as disruptions around key Gulf shipping routes push up global oil prices, drive fuel costs higher and force the government to consider measures to curb petroleum consumption.

Prime Minister Shehbaz Sharif’s government raised petrol prices by PKR 4.10 per litre and high-speed diesel by PKR 6.41 on Tuesday night. Petrol now costs PKR 384.34 per litre, while diesel has risen to PKR 415.83.

The increase has intensified concerns over how long Pakistan’s economy can absorb the global oil shock, with the government simultaneously expanding fuel subsidies and trying to protect electricity generation from disruptions in imported energy supplies.

Fuel Relief Scheme Expanded As Prices Surge

Climate Change Minister Musadik Malik said the government was attempting to absorb part of the fuel price increase through its relief programme.

Under the scheme, motorcyclists would receive subsidised petrol for up to five litres a week, while car owners would get relief on up to 10 litres every 10 days.

Malik said the subsidy would not completely offset the increase but represented the maximum burden the economy could currently absorb.

The government has also accelerated the rollout of the fuel relief programme. A National Steering Committee on Fuel Subsidy, chaired by Deputy Prime Minister Ishaq Dar, has directed that payments to fuel stations be processed within 24 hours. The scheme, initially piloted in Islamabad, is now being expanded across Pakistan.

Pakistan also shifted to a daily petroleum pricing mechanism in July, replacing its earlier weekly system as global oil prices became more volatile amid geopolitical tensions.

RLNG Costs Rise, Govt Looks To Domestic Energy

Energy Minister Awais Leghari said Pakistan had managed to keep its power plants running despite disruptions by maximising domestic energy resources.

In August, about 72% of Pakistan’s electricity generation came from domestic sources, including hydropower, local coal, nuclear power, domestic gas, wind and solar. The remaining 28% came from imported coal and regasified liquefied natural gas (RLNG).

Leghari said disruptions to RLNG supplies had pushed spot cargo prices to $23.25 per million British thermal units (MMBtu). Greater use of domestic gas helped Pakistan avoid purchasing additional RLNG at those prices, he said.

According to Leghari, without the additional domestic gas, Pakistan could have faced another hour of load shedding. Greater dependence on furnace oil or imported RLNG could also have increased consumer tariffs by around PKR 10.6 billion.

The government is also facing pressure to reduce petroleum consumption if disruptions persist. Officials have discussed the possibility of reintroducing austerity measures, including a “smart lockdown” involving shorter working weeks and earlier market closures—steps used during the peak of the US-Iran conflict.

Information Minister Atta Tarar has indicated that such measures could return if the regional situation deteriorates. Malik, however, rejected reports that a smart lockdown was currently under discussion, saying no such talks had taken place.

The energy squeeze is adding to political pressure on the government. Jamaat-i-Islami has threatened nationwide demonstrations next week if fuel prices are not reduced.

Meanwhile, Saudi Arabia’s decision to shut its East-West oil pipeline after an aerial attack has added to concerns about global supplies, further exposing Pakistan’s vulnerability to disruptions in international energy markets.