Quick summary
- Islamabad considers building strategic petroleum reserves
- to counter supply shocks due to reliance on imports through the Strait of Hormuz
- in light of its economic relationship with international lenders
Key quotes
The government is proposing initiatives…energy security.
unidentified source from the document
The energy ministry of Pakistan is proposing to build strategic petroleum reserves and commercial storage facilities as a response to supply shocks provoked by the Iran war. This initiative comes amid Islamabad’s heavy reliance on imports through the Strait of Hormuz, which accounts for up to 90 per cent of its oil and liquefied natural gas (LNG) supplies.
The government plans to build these reserves as a strategic measure due to Pakistan having no existing petroleum stocks. This initiative is also influenced by the country’s economic situation, which limits room for costly state-owned emergency stocks because of its lending programme with the International Monetary Fund.
The proposal includes building reserves through bonded terminals and refineries as well as upgrading existing oil marketing companies to enhance storage capacity. The plan also encourages increased local exploration and production for more domestic supply security.
Topic: Pakistan Economy
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