Pakistan Bets on Oil Storage for Energy Security

Pakistan is set to enhance its energy security by developing significant domestic storage capacity for crude oil and refined products. This strategic move comes as the nation currently possesses no strategic petroleum reserves, despite importing up to 90% of its oil and LNG through the critical Strait of Hormuz. The government aims to mitigate supply shock risks, which have been amplified by geopolitical tensions.

The energy ministry's comprehensive plan involves establishing both strategic reserves and commercial storage solutions. This includes leveraging bonded terminals, refineries, and oil marketing companies. Additionally, Pakistan is pushing for increased oil and gas exploration and production, alongside upgrades to its existing refineries and consolidation of its downstream sector.

To fund the government's strategic reserves, a dedicated fund will be established, financed by a 10 rupees per litre levy on petroleum products. Allocations for this fund are scheduled to commence on July 1, with projections indicating an annual generation of approximately $700 million. This initiative aims to shore up national energy supplies effectively.