Pakistan Admits No Strategic Oil Reserves Like India Amid Global Shock

The admission follows a surge in oil prices to USD 126 per barrel, the highest since 2022, as shipping remains obstructed in the Strait of Hormuz. In an interview with Samaa TV, Petroleum Minister Musadik Malik revealed that Islamabad possesses only a few days of crude supplies, highlighting a massive energy security deficit compared to India's estimated 60-70 days of combined strategic and commercial stocks.

"We don't have any strategic oil reserves... we only have commercial reserves. We have crude worth five to seven days. And the refined product with OMCs can only last 20-21 days. We are not like India, which has 60-70 days of reserves and can release it with just a single signature," Malik stated.

The minister further detailed that Pakistan does not possess strategic petrol reserves even for a single day, leaving the country's energy infrastructure completely defenceless against external disruptions. He credited India's economic resilience to its superior foreign exchange position and strategic planning.

"India doesn't just have 600 Arab dollars worth of reserves, but they also maintain strategic reserves. This helps them cushion this crisis. Besides, they are not part of the IMF programme, and they tried to insulate themselves by reducing taxation as oil prices soared... they had the fiscal space to do that," Malik noted.

While India enjoys fiscal independence, Pakistan remains shackled by the International Monetary Fund (IMF), which has severely restricted its policy options. Malik disclosed that Islamabad was forced into backchannel negotiations with the IMF to seek minor relief for consumers. He explained that, under the budget agreed with donor agencies, Pakistan is required to impose heavy levies on fuel to cover fiscal deficits.

"Now, with diesel prices rising up to 3-4 times, we decided to reduce the levy to zero on diesel and shift the entire burden to petrol while protecting motorcyclists by giving them targeted subsidy. However, had we broken our commitment with the IMF and increased our losses, the consequences would have been worse. We conducted backchannel negotiations with the IMF and convinced them to reduce the levy by 80 rupees per litre," the minister added.

The energy crisis has sparked widespread civil unrest across Pakistan. Despite a recent reduction in petrol prices by PKR 80 to PKR 378 per litre by Prime Minister Shehbaz Sharif, a previous 42.7 per cent price hike had already driven costs from PKR 321.17 to PKR 458.41, leading to massive protests and fuel shortages.

These regional struggles coincide with global supply chain paralysis resulting from US-Iran tensions. Since the commencement of US and Israeli strikes on 28 February, Iran has restricted access to the Strait of Hormuz, a transit point for about one-fifth of global oil and LNG.

In sharp contrast to the chaos in Pakistan, India has maintained domestic fuel price stability. The Indian government successfully utilised the Central Excise Act, 1944, to revise duties for the second time in a month, protecting its citizens and oil marketing companies from the global spike that saw crude jump from around USD 70 to over USD 120 per barrel over the past month.

- ANI