Pakistan has admitted its vulnerability to the ongoing global oil shock saying the country lacks "strategic oil reserves like India" that have helped New Delhi cushion the impact of soaring crude prices triggered by tensions in the Middle East.
The remark comes as oil prices surged to $126 per barrel, the highest since 2022, amid disruptions in the Strait of Hormuz.In an interview with Pakistan-based Samaa TV, Petroleum minister Malik said that Islamabad holds only a few days of crude reserves, compared to New Delhi's estimated 60–70 days of combined strategic and commercial stocks, underscoring the gap in energy security between the two countries."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," he said.
He further underscored the scale of the challenge, noting that Pakistan does not have strategic petrol reserves even for a single day, leaving its energy system highly exposed to external shocks.Malik pointed out that India’s relative stability stems not just from its strategic petroleum reserves but also from its strong foreign exchange position.
"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 IMF programme and they tried to insulate themselves by reducing taxation as oil prices soared ... they had the fiscal space to do that," he said.In contrast, Pakistan’s economic constraints, particularly its reliance on the International Monetary Fund (IMF) have limited its policy flexibility.
Malik said Islamabad had to negotiate with the IMF to provide relief to consumers amid rising fuel costs.He further explained that during the budget process, Pakistan agreed with the IMF and other donor agencies to impose levies on petrol and diesel to manage fiscal losses."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 IMF and increased our losses, the consequences would have been worse. We conducted backchannel negotiations with IMF and convinced them to reduce levy by 80 rupees per litre," he said.The fuel crisis has already triggered public anger in Pakistan. Earlier last month, Prime Minister Shehbaz Sharif announced a reduction in petrol prices by PKR 80 (Rs 24) per litre, bringing it down to PKR 378 (Rs 113.40) per litre.The move came shortly after a steep hike of 42.7% had pushed petrol prices from PKR 321.17 (Rs 96.35) to PKR 458.41 (Rs 137.52) per litre, sparking protests and long queues at fuel stations across the country.The development comes at a time when global oil supply chains remain under strain due to the ongoing US-Iran tensions, which have effectively choked shipping through the Strait of Hormuz, a crucial route that typically carries about one-fifth of the world’s oil and LNG supplies.Since February 28, when US and Israeli air strikes on Iran began, tensions have escalated sharply, disrupting shipping routes and tightening supply. Iran has restricted access through the Strait of Hormuz, while the US has imposed measures targeting Iranian oil exports, further constraining flows.Despite the global turmoil, India has managed to keep petrol and diesel prices relatively stable. The government recently revised central excise duties to ease pressure on oil marketing companies that were facing losses due to rising crude prices.These measures, taken under the Central Excise Act, 1944 and related Finance Acts, mark the second revision in fuel duties within a month. The move is aimed at offsetting the sharp increase in global crude prices, which have climbed from around $70 per barrel to over $120 over the past month.
Should the Pakistani government negotiate more aggressively with the IMF for greater flexibility during crises?
