Pakistan’s federal government is reviewing several austerity measures, including imposing speed limits on vehicles, as part of a national fuel-saving plan amid oil supply disruptions in the Middle East following strikes by Israel and the United States on Iran.
Speaking on the Aiteraz Hai programme on ARY News, Federal Minister for Petroleum Ali Pervaiz Malik said the government’s strategy focuses on energy conservation and changes in public habits to reduce fuel consumption.
“One is conservation, what habits we can adopt and how we can modify our lifestyle to reduce our energy footprint in daily routines,” the minister said.
Malik said consultations with all provincial governments have been completed, and the federal government will soon announce a series of measures. These could include imposing speed limits on vehicles, as fuel consumption increases with higher driving speeds.
He noted that Pakistan had implemented similar measures during the COVID-19 pandemic, including work-from-home policies and shifting educational institutions to online learning.
The government has already increased fuel prices by Rs55 per litre, citing rising global oil costs linked to escalating tensions in the Middle East. Under the new rates, petrol costs Rs321.17 per litre, while diesel has increased from Rs275.70 to Rs335.86 per litre.
Meanwhile, some stakeholders have suggested importing Russian oil after shipping through the Strait of Hormuz was disrupted, threatening nearly one-fifth of global oil supplies.
However, Malik said importing Russian crude is not currently viable for Pakistan due to technical and financial challenges. He explained that Russian Urals crude is heavy, while most refineries in Pakistan are old hydroskimming facilities, except the Pak-Arab Refinery Company (PARCO).
“When heavy crude is refined in hydroskimming refineries, it produces a large amount of furnace oil,” he said, adding that furnace oil faces a carbon levy under the International Monetary Fund’s Resilience and Sustainability Facility (RSF) because it is considered a highly polluting fuel.
Malik added that the government is engaging with the IMF to seek relief from fuel levies under both the RSF and the International Monetary Fund’s Extended Fund Facility (EFF) to help address challenges in the energy sector.
He further revealed that LNG supplies from Qatar have been suspended, prompting the government to consider generating electricity using furnace oil to meet energy needs.
“For that reason, Russian crude is not commercially viable because our refineries are not sufficiently upgraded,” Malik concluded.
