Pakistan is working with Saudi Arabia, Kuwait and Qatar on a proposed bonded oil storage scheme aimed at strengthening the country’s energy security amid growing concerns over global supply disruptions.
Petroleum Minister Ali Pervaiz Malik said the three countries would store crude oil on secure sites in Pakistan at their own expense and use the facilities to supply international markets.
Speaking at a press conference in Lahore, Malik said Pakistan would have the option to purchase the stored oil in the event of a conflict by paying the respective countries, allowing it to meet its domestic requirements.
The minister said the commercial bonded storage scheme, prepared with assistance from Saudi Aramco and other major companies, had been submitted to the Economic Coordination Committee (ECC) on Prime Minister Shehbaz Sharif’s directives. A decision is expected next week.
Pakistan has been seeking to expand its domestic storage capacity for crude oil and refined petroleum products as it lacks strategic petroleum reserves, leaving the country vulnerable to supply disruptions.
Malik said the government would continue efforts to improve energy security, noting that establishing crude oil reserves for one month would require around $500 million, while an underground storage system could cost an additional $300-400 million.
He said the government would later assess whether it could undertake such an investment, adding that the matter would be discussed in the coming months.
The minister said Pakistan currently imports nearly 90 per cent of its energy requirements. Domestic oil production is around 70,000 barrels per day, compared with daily consumption of approximately 500,000 barrels.
He stressed the need to accelerate domestic oil and gas exploration to reduce the country’s dependence on energy imports.
Malik said Prime Minister Shehbaz Sharif and Field Marshal Asim Munir had tasked a leading international company with developing a comprehensive roadmap for Pakistan’s energy sector. The plan is expected to be presented to the country’s leadership in the coming months.
He also announced that Türkiye’s state-owned Turkish Petroleum would soon begin offshore drilling operations in Pakistan’s territorial waters, which he said could attract significant foreign investment in the energy sector.
The petroleum minister further said tenders for liquefied petroleum gas (LPG) would open on Monday, while arrangements had been made to issue new gas connections to consumers.
Discussing the impact of the US-Israel conflict with Iran, Malik said the government had ensured uninterrupted fuel supplies across the country despite pressure on the economy and rising international petroleum prices.
He said the government was making efforts to shield consumers from the full impact of higher global prices and provide maximum relief despite limited financial resources.
Malik said Prime Minister Shehbaz had introduced a transparent petroleum pricing mechanism, with pricing calculations available on the Oil and Gas Regulatory Authority’s (Ogra) website.
The government has been revising fuel prices almost daily since mid-July in response to fluctuations in international oil markets following renewed hostilities between the United States and Iran. Previously, prices had been revised weekly since the conflict began, alongside measures aimed at conserving fuel.
Referring to the refinery policy approved by the federal cabinet last month, Malik said the government was also working to resolve long-standing financial challenges in the petroleum sector.
He said the flow of circular debt had been halted, while efforts were underway to clear outstanding liabilities inherited from previous administrations.
