Pakistan boosts oil storage security

Pakistan is initiating a comprehensive plan to bolster its energy security by significantly increasing domestic storage for crude oil and refined products. This move is driven by its heavy reliance on supplies through the Strait of Hormuz and vulnerabilities exposed by events like the Iran war, coupled with the absence of strategic petroleum reserves. The energy ministry proposes building strategic reserves and commercial storage through bonded terminals, refineries, and oil marketing companies. It also aims to boost oil and gas exploration, upgrade refineries, and consolidate the downstream sector. The proposed framework has been shared with major international oil producers and trading firms, including Saudi Arabia, Abu Dhabi National Oil Company, Bharat Petroleum, QatarEnergy, PetroChina, Vitol, Trafigura, and Vopak. Petroleum Minister Ali Pervaiz Malik acknowledged the fiscal challenges, particularly under an International Monetary Fund program, but emphasized the government's commitment to swift implementation. The plan includes a ring-fenced fund, financed by a 10 Pakistan — Pakistani rupee per liter levy on petroleum, expected to generate $700 million annually starting July 1. Additionally, refineries will be required to hold 15 days of crude stocks and oil marketing companies 30 days of finished products by June 2028. The initiative also calls for an energy infrastructure corridor around Hub and Port Qasim to reduce reliance on smaller, costlier shipments.