Pakistan has temporarily allowed the import of cheaper, lower-grade high-speed diesel ahead of the upcoming harvest season, reversing a ban that had been in place for nearly a decade as authorities move to secure adequate fuel supplies.
The key development is the approval of an exemption for 500ppm sulphur diesel, commonly classified as Euro II and Euro III standard, due to tight availability and higher prices of 10ppm Euro 5 diesel in the international market.
The decision was taken by the Special Cabinet Committee on Petroleum Prices led by Muhammad Aurangzeb, which was informed that diesel demand is expected to rise sharply during the April to May harvest period and that timely stock buildup is essential to prevent shortages and hoarding.
State run Pakistan State Oil has already arranged a large cargo of the lower sulphur standard diesel, with officials noting that the import premium is significantly lower, around USD 6 to 7 per barrel compared with USD 26 to 27 per barrel for Euro 5 product.
In a parallel move, authorities have also been directed to secure Iranian clearance for ships passing through the Strait of Hormuz to lift fuel cargoes from Kuwait, a step expected to lower insurance costs and support uninterrupted imports.
Officials said current diesel stocks provide around 23 to 24 days of cover, while authorities have stepped up monitoring to discourage speculative stockholding and ensure smooth nationwide distribution as global oil markets remain volatile.