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Aftab Maken
ISLAMABAD: Pakistan is once again facing mounting pressure from global oil market volatility after a sharp rise in diesel import premiums pushed the country closer to a fresh fuel price shock.
The country’s largest fuel importer, Pakistan State Oil (PSO), has reported an unprecedented surge in high-speed diesel (HSD) premiums, which have jumped from around $12 per barrel to more than $35 per barrel in recent cargoes. The increase has been linked to escalating disruptions in the strategically vital Strait of Hormuz, a key maritime chokepoint through which nearly one-fifth of global oil shipments pass.
Sharp rise in import costs
In a communication sent to the Oil and Gas Regulatory Authority (OGRA), PSO revealed that its latest diesel cargo, MT Kaliban, was procured at a premium of $35.612 per barrel—almost triple earlier levels.
Industry sources say earlier shipments were typically booked at premiums near $12 per barrel, but rising geopolitical tensions and shipping disruptions in the region have significantly altered global supply routes. Increased war-risk insurance costs, rerouting of tankers, and reduced traffic through the Strait have all contributed to the spike.
Possible price hike of over Rs120 per litre
According to PSO estimates, if the revised premium is fully incorporated into the pricing structure, the ex-refinery price of diesel could rise by Rs122.76 per litre, lifting it from the current level of Rs496.97 per litre.
Such an increase would translate into a sharp rise at the pump, further intensifying inflationary pressures already affecting transport, agriculture, and industrial sectors.
Economy under strain
Pakistan’s economy remains highly exposed to global oil shocks due to its heavy reliance on imported petroleum products. Analysts warn that disruptions in the Strait of Hormuz not only increase direct fuel costs but also add indirect pressure through freight charges, insurance premiums, and currency depreciation.
Experts have previously cautioned that sustained instability in the region could significantly inflate Pakistan’s monthly import bill and push inflation deeper into double-digit territory.
Farmers, transport operators, and industrial consumers are expected to bear the brunt of any upward revision in diesel prices, which remains a key input for goods movement and agricultural activity.
Outlook remains uncertain
Government authorities have so far absorbed some international price fluctuations through periodic adjustments, but the scale of the current premium surge raises questions about the scope for further cushioning measures.
PSO has also warned that upcoming cargoes scheduled for April may continue to carry elevated premiums, suggesting that pricing pressures could persist in the near term.
With geopolitical tensions in the Middle East showing little sign of easing, Pakistan’s vulnerability to external oil shocks remains a critical economic challenge, highlighting the need for longer-term energy diversification and strategic planning.
