Pakistan Mulls Over Petroleum Price Revision After Tanker Traffic Plunges 90% In Strait Of Hormuz

Israel-US-Iran War: In the backdrop of escalating tensions in West Asia induced by Israel-US conflict with Iran, Pakistan mulls over revising petroleum prices, providing compensation for oil companies, and transitioning to work-from-home to keep markets functioning after the oil tanker traffic in the Strait of Hormuz declined by 90%. 

In the backdrop of escalating tensions in West Asia induced by Israel-US conflict with Iran, Pakistan mulls over revising petroleum prices, likely compensation for oil companies, and work-from-home transition to keep markets functioning after the oil tanker traffic in the Strait of Hormuz declined by 90%.

The propositions are being submitted to the South Asian nation's Federal Cabinet’s Economic Coordination Committee (ECC) for its nod as fuel prices signal a further spike, as per the Dawn newspaper.

Ahead of the committee chaired by Pakistan's Finance Minister Muhammad Aurangzeb decides over petrol price revision, the state-owned undertaking Pakistan State Oil (PSO) has issued two import tenders each for petrol and diesel from sources outside the Strait of Hormuz as a precaution.

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Currently, Pakistan holds 5,00,000 tonnes each of petrol and diesel stocks, sufficient for about 26 and 25 days respectively.

Authorities are also planning to shift fuel price revisions from a fortnightly to a weekly basis to prevent large financial gaps for OMCs and the government and to ensure steady fuel supplies.

One official said the price gap had already widened to PKR 45-50 per litre for diesel and around PKR 25-26 for petrol in the first week of the crisis and could rise further in the coming weeks.

Meanwhile, petrol imports remain relatively secure, diesel supplies are more vulnerable as Pakistan relies heavily on long-term shipments from Kuwait that pass through the Strait of Hormuz. According to several government reports, 35% of Pakistan's diesel comes from Iran.

In this week, the oil tanker transit recorded in the Strait of Hormuz was 90% lower as compared to last week, according to energy intelligence firm Kpler.  

The vital strait open for maritime trade located between Iran, Oman and the UAE, is credited for almost 20% of the world's oil supply flows, nearly 17 million barrels every day.
 

(This is a developing story)