DESPITE the disruption caused by the US-Iran war and the closure of the Strait of Hormuz, the government deserves credit for ensuring uninterrupted fuel supplies across the country. At a time when global oil markets faced severe uncertainty and petroleum prices surged, Pakistan managed to keep its energy supply chain functioning. However, the crisis has also exposed a longstanding vulnerability that can no longer be ignored: the absence of adequate strategic petroleum reserves.
The situation has made it imperative for Pakistan to have sufficient strategic reserves of crude oil and petroleum products to withstand supply disruptions in the event of any conflict or other unforeseen eventuality. In this regard, Petroleum Minister Ali Pervaiz Malik’s announcement that Saudi Arabia, Kuwait and Qatar will enter into a bonded scheme under which they will store oil on secure Pakistani territory at their own cost is a welcome development. The arrangement could not only turn Pakistan into an important regional oil storage and supply hub but also provide the country with an additional cushion during a crisis. As the Minister pointed out, Pakistan would have the right, in case of a conflict, to purchase those resources and meet its own requirements. Yet, such arrangements should complement, rather than substitute, efforts to achieve greater self-reliance. Pakistan currently produces only around 70,000 barrels of oil per day against daily demand of approximately 500,000 barrels, while around 90 per cent of its energy requirements are met through imports. This heavy dependence places enormous pressure on the economy and exposes the country to international price shocks and geopolitical disruptions. The government, therefore, needs to work on a war footing to increase domestic oil and gas exploration and production. A sustained and coordinated effort to raise indigenous production, develop strategic reserves and attract investment in exploration is essential. Greater domestic production would not only strengthen Pakistan’s energy security but also reduce the import bill, conserve foreign exchange and provide a much-needed boost to the national economy.
