KARACHI: Pakistan is exploring measures to diversify fuel supplies and strengthen strategic petroleum reserves as it seeks to protect the domestic market from disruptions to Gulf shipping routes, the country’s largest state-owned oil company said on Friday.
Petroleum Minister Ali Pervaiz Malik discussed proactive international procurement, longer-term diversification of supply sources and stronger strategic buffer reserves with the leadership of Pakistan State Oil (PSO), days after Islamabad commissioned an international consultancy to study the feasibility of establishing strategic petroleum reserves.
“Discussions addressed the evolving international environment, including volatile global fuel prices and disruptions to key maritime corridors,” PSO said in a statement after Malik met its chief executive Jawwad Ahmed Cheema.
Pakistan imports most of its fuel and has faced greater exposure to price volatility and shipping disruptions since the war involving the United States and Iran began in late February, with tensions affecting traffic through the Strait of Hormuz, a key route for global oil shipments.
Friday’s discussions came three days after the Petroleum Division launched a feasibility study on establishing strategic petroleum reserves, appointing international energy consultancy Wood Mackenzie following a competitive tender process.
The government said the study would assess technical, financial, commercial, legal and institutional options for developing reserve capacity, including the possible use of existing infrastructure and public-private partnership models.
At PSO on Friday, Malik also reaffirmed government plans to expand fuel storage infrastructure, accelerate digitization and automation and improve supply-chain resilience, according to the company.
In July, Malik said Prime Minister Shehbaz Sharif had formed a high-level committee to recommend an energy security framework that could include strategic petroleum reserves, commercial storage arrangements with international energy companies and measures to boost domestic exploration.
Information Minister Attaullah Tarar said at the time that Pakistan held fuel reserves sufficient for one to two months.
PSO said earlier this week it was also exploring an expanded partnership with Kuwait Petroleum Corporation covering petroleum products, refining, storage infrastructure, terminals, shipping and logistics. The two companies have supplied Pakistan with gasoil and jet fuel since 1975.
Malik said separately on Friday that Pakistan’s five oil refineries were ready to sign long-delayed upgrade agreements worth more than $6 billion, aimed at enabling them to produce Euro-5 grade fuel and reduce reliance on imported petrol and diesel.
PSO is Pakistan’s largest oil marketing company, with a 42.6 percent share of the white oil market, according to its March report.
