DURING March 2026 when US-Israel coalition suddenly attacked Iran for achieving their ulterior motives, peace in the Middle East was quite obviously disrupted and fuel supplies were also hit adversely and resultantly fuel crisis was created in the countries like Pakistan which were mostly dependent on meeting their requirements through imported fuel. The regional conflict so unleashed posed external and internal challenges for the civil and military leadership of Pakistan both directly and indirectly. Federal coalition government headed by untiring and active Prime Minister Shehbaz Sharif along with Deputy PM/Foreign Minister Ishaq Dar and Field Marshal Syed Asim Munir got down to their important tasks of making concerted efforts for early return of peace in the Middle East externally and taking prompt measures for tackling the fuel crisis internally and at the same time taking a number of austerity measures for minimizing the fuel usage in public and private sectors.
While the Middle East conflict continued, fuel supply chains were disrupted to a great extent and this obviously called for concrete and effective measures to ensure the fuel consumption was kept under some check and the people were also provided relief through sorts of subsidies viz a viz to the different segments of those using fuel in buses, trucks, motorcycles, rickshaws etc. As the fuel supply chains were disrupted, internationally oil prices remained under pressure and constantly indicating upward trend in oil prices.This obviously hit Pakistan which met its oil requirements through import of more than 80 percent of its requirements.While Pakistan’s leadership remained engaged in contacting leadership of the regional countries as well as the other countries and international forums topped by the United Nations, it was also seized of the pressure so being built on Pakistan Iinternaly. The efforts on the diplomatic front would be dilated upon some other time. This piece was mainly to highlight how a resource-constrained, import-dependent economy country like Pakistan through its leadership was able to tackle the global petroleum price surge quite effectively while also ensuring to keep the resultant financial impact on the people to the minimum possible.
The crisis triggered by escalating Middle East conflict as mentioned above had sent prices to historic highs within a matter of days thereby forcing the leaderships of the countries around the globe to make difficult trade-offs between fiscal stability and public burden sharing. However, in Pakistan’s case, the initial policy response under PM Shehbaz Sharif’s active and agile leadership was to ensure the federal government should absorb the immediate shock rather than transmitting it to the fuel consumers across the country.
Accordingly , in about three weeks, the federal government as per the decisions taken by the PM allocated about Rs 129 billion for keeping petroleum prices stable and minimizing the adverse impact on the people to the maximum extent possible. It was worth mentioning here that besides the fiscal intervention in this way, the federal government simultaneously also took decisions and made persistent efforts to ensure fuel supply stability with help, cooperation and positive response from friendly countries.
Resultantly , during a period when internationally several countries experienced fuel shortages, long queques, and rationing, Pakistan’s domestic market remained relatively stable. Fuel stations continued working and operative without any sort of disruption, even during the Eidul Fitr days when fuel demand typically peaked. Quite obviously, this outcome was the result of pre-e mptive supply chain management, active coordination with the oil refineries and importers and close monitoring by the concerned Federal Government Ministries/ Divisions
However, given {Pakistan;s fiscal constraints, such universal price shielding was not indefinitely sustainable.. As the fuel prices internationally continued to rise and fiscal pressures intensified, keeping the entire situation in view a policy approach was evolved, instead of a sudden withdrawal of support, the federal government quite sensibly and appreciably transitioned towards a targeted subsidy framework aimed at cushioning the most affected segment of the society. In order to ensure .unanimous by one and all, the prime minister convened a national level consultation involving the four provinces among all others to exchange view as how to effectively and unanimously deal with the emerging situation and develop a well-coordinated strategy for implementation at the federal and provincial levels in a well-expected coordinated manner.. The outcome of this consultation was a jointly subsidy regime, targeting transport workers, motorbike users, small farmers, and public transit systems/ sectors with high exposure to fuel price fluctuations internationally and strong downstream effects on inflation hitting the people at large. The subsidies so announced were designed to contain second-roug economic impacts,particularly in transport costs and agricultural production, both of which directly influence food prices and the cost of living for the rural population. Following the measures taken by the federal government, the provinces subsequently also adapted and implemented these for realizing the objectives so desired.
Even after this transition to targeted support, in a further step , the federal government quite wisely and appreciably announced a reduction of R s 80 per litre in the petroleum regime thus offsetting the rising petroleum costs, which quite expectedly resulted in a downward adjustment in retail fuel prices.
—The writer is contributing columnist, based in Lahore.
