Government Restricts Furnace Oil Exports Amid Regional Energy Tensions

The federal government has tightened controls on furnace oil exports, directing oil refineries to obtain prior approval before shipping the fuel abroad. The decision comes as authorities monitor growing energy supply risks linked to regional geopolitical tensions.

According to officials, refineries must now seek permission from the Prime Minister’s Committee on the Monitoring of Petroleum Prices before exporting furnace oil. The directive was issued by the Ministry of Energy’s Petroleum Division to ensure the country maintains sufficient fuel reserves during uncertain global market conditions.

Reason Behind the Decision

The government was restricted due to volatility in global oil markets following the escalating conflict involving Iran, the United States, and Israel. These tensions have disrupted shipping routes and raised fears of supply shortages in the region.

A key concern is the Strait of Hormuz, a strategic waterway through which about 20% of global oil supplies pass. Any disruption in this corridor can quickly trigger spikes in energy prices and create logistical challenges for importing countries.

Pakistan’s Heavy Dependence on Imported Fuel

Pakistan relies heavily on imported petroleum products, particularly from Gulf countries. Data from the current fiscal year shows that during July to February, the country imported:

• 3.6 million metric tonnes of petrol, accounting for about 70% of domestic consumption
• 1 million metric tonnes of high-speed diesel, roughly 21% of national demand

Because of this dependence, even short disruptions in regional oil supply routes can significantly impact Pakistan’s fuel availability and prices.

Rising Global Oil Prices

Global energy markets have already reacted to the conflict, with sharp increases in petroleum prices. Reports indicate that the free-on-board price of diesel jumped about 34%, while petrol prices rose roughly 27% in a short period following the escalation.

Shipping costs for oil tankers moving through the Gulf region have also surged, as insurers and maritime authorities warn vessels to exercise caution when passing through high-risk areas.

Impact on Pakistan’s Energy Planning

By restricting furnace oil exports, the government aims to ensure sufficient domestic fuel supply and greater control over petroleum stocks during a period of global uncertainty.

Officials say the measure is temporary and may be revised depending on how regional tensions and global oil markets evolve in the coming weeks.

The move highlights Pakistan’s vulnerability to geopolitical shocks in global energy supply chains and underscores the need for careful management of domestic fuel reserves during periods of international instability.