Big energy push: Pakistan decides to build 90-day strategic petroleum reserves

ISLAMABAD – The Pakistani government has decided to strengthen its energy security by building one-to-three month strategic petroleum reserves to cater the country’s fuel needs in case of global vulnerabilities or conflicts. The move comes in response to rising tensions in the Middle East and disruption in energy supplies that drive the petrol and diesel prices in Pakistan to historic high. In the initial phase, Pakistan aims to establish one month’s worth of petroleum reserves, with an estimated cost of around $1 billion. Of this, approximately $550 million will be used to procure petroleum products, while over $30 million is expected to be spent on storage facilities. Reports claimed that that Saudi Arabia and Kuwait have shown interest in investing in the project. Several other countries, including Japan, have already established similar strategic reserves. Currently, Pakistan’s government-level petroleum reserves are minimal, with commercial stocks covering only about 21 days of demand. Authorities stressed that separating strategic reserves from commercial stocks will ensure uninterrupted fuel supply during emergencies or global market disruptions. The strategic reserve plan is part of Pakistan’s long-term energy security strategy. The country also has an existing long-term petroleum import agreement with Qatar, further supporting its energy stability. Additionally, the plan envisions that friendly countries maintaining strategic reserves could supply Pakistan if needed, and Pakistan could also provide petroleum to these nations in emergencies.