How much could Petrol Prices in Pakistan fall with Iranian Oil Imports? EXPLAINED

ISLAMABAD – The easing of US sanctions on Iranian oil sparked debate over whether Pakistan can finally tap into its western neighbour’s vast energy reserves and ease the burden of soaring fuel import costs. With Washington granting Iran 60-day window to export crude oil and petrochemical products, Pakistanis questioned whether the government could avail opportunity to secure cheaper oil and bring relief to consumers. However, industry experts say the picture is far more complicated than it appears. Federal Petroleum Minister Ali Pervaiz Malik confirmed that Pakistan is actively engaging with Iranian authorities to explore energy cooperation, including the possibility of importing crude oil. The minister also addressed the long-stalled Iran-Pakistan (IP) Gas Pipeline, saying the dispute remains before the Paris Court of Arbitration but stressing that both countries should resolve the matter through negotiations rather than legal battles. He made it clear that affordability would remain Pakistan’s top priority. “If locally produced gas costs around $6 and imported gas around $10, we will not purchase Iranian gas if it costs even more,” he stated, adding that technical teams from both countries are working to find a mutually beneficial solution. IP Gas Pipeline has remained largely dormant since its inauguration in 2013 by then-President Asif Ali Zardari. While Iran completed its portion years ago, Pakistan’s planned 780-kilometre pipeline was never built due to U.S. sanctions and funding constraints. Iran eventually moved the dispute to international arbitration in 2024. Pakistan remains heavily reliant on imported petroleum products despite domestic refining capacity. According to the Pakistan Oil Report FY2025, the country consumes around seven million tonnes of petrol and diesel annually. Domestic refineries produce nearly five million tonnes of diesel, while another two million tonnes are imported. Petrol tells a different story, with