Pakistan moves to build strategic oil reserves amid supply security concerns

Pakistan has initiated progress on a plan to establish strategic petroleum reserves aimed at building fuel storage capacity sufficient for up to 90 days, according to official sources. The move is intended to strengthen energy security amid rising global uncertainty in oil markets.

The initiative is being developed in response to potential disruptions in global oil supply routes, particularly the Strait of Hormuz, which is considered a critical passage for international oil shipments. Concerns over instability in the region have increased following recent military tensions involving the United States and Israel in relation to Iran, which have further unsettled global energy markets.

Pakistani authorities view the situation as a reminder of the country’s heavy reliance on imported oil and its vulnerability to external supply shocks. In this context, the government is exploring policy measures to finance and support the creation of strategic storage infrastructure.

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As part of the emerging plan, authorities are considering the imposition of a petroleum levy on petrol and diesel. Officials estimate that a levy of Rs10 per litre could generate approximately Rs200 billion annually, based on an estimated annual consumption of 20 billion litres of fuel across the country.

Over a period of three years, this revenue could accumulate to around Rs600 billion, equivalent to more than $2 billion, which would be directed toward the development of strategic petroleum storage facilities.

Officials believe that the establishment of such reserves would help Pakistan manage future supply disruptions, stabilize domestic fuel availability, and reduce vulnerability to global price shocks. The plan is still under policy consideration, and further details regarding implementation, storage locations, and financing mechanisms are expected to be finalized in upcoming phases.