Authorities have issued a warning that domestic fuel prices may increase in line with global market trends, as oil prices have surged by 16% due to the Iran-Israel conflict, with no plans to reduce the Petroleum Development Levy (PDL).
Reuters reported that global oil prices experienced fluctuations on Monday, following a 7% surge on Friday. This volatility was triggered by renewed strikes between Israel and Iran over the weekend, sparking fears of a broader regional conflict that could disrupt oil exports from the Middle East. Brent crude futures saw a slight increase of 6 cents (0.08%) to $74.29 a barrel, while US West Texas Intermediate crude futures gained 21 cents (0.29%) to $73.19. Earlier in the session, prices had surged by over $4 a barrel before briefly dipping into negative territory.
During a meeting of the National Assembly’s Standing Committee on Finance, chaired by Naveed Qamaron on Monday, Finance Secretary Imdadullah Bosal stated that Pakistan currently possesses sufficient petroleum reserves. However, he emphasized that if global prices continue their upward trajectory, domestic prices will need to be adjusted accordingly.
“We’re keeping a close watch,” Bosal affirmed. “But if rates go up internationally, we’ll have to increase ours too, and the levy is staying in place.”
Opposition Leader Omar Ayub raised concerns about the deteriorating economic outlook, highlighting that Pakistan is already ensnared in a domestic debt trap. He warned that the conflict is likely to exacerbate both the budget deficit and the trade gap.
In a rare display of bipartisan consensus, Finance Minister Muhammad Aurangzeb concurred with the opposition’s assessment and confirmed that Prime Minister Shehbaz Sharif has established a high-level committee to monitor petroleum prices and stockpiles.
“The committee has already met today (Monday),” he stated.
Ayub further characterized the regional crisis as a “tipping point,” cautioning, “The situation is deteriorating fast. The world is heading towards a broader war, and everything could be swept away.”
The Middle East was thrust into a perilous new phase of conflict following an unprecedented escalation of hostilities between Israel and Iran on Friday. An unprovoked Israeli strike targeting Iran’s top military and nuclear figures under the cover of night quickly escalated into a full-blown conflict, marked by heavy exchanges from both sides and a significant risk to regional stability.
Earlier on Monday, the Finance Minister presided over the inaugural meeting of the high-level committee formed to oversee petroleum prices amidst regional tensions. The committee conducted a detailed assessment of both the global and domestic petroleum market situations.
According to a press release, in response to the evolving geopolitical landscape following Israel’s recent attack on Iran and the resulting volatility in international oil markets, the Prime Minister constituted this high-level committee to monitor petroleum product pricing and supply dynamics.
The committee is chaired by the Finance Czar and comprises senior representatives from key federal ministries, regulatory authorities, and energy sector experts.
The committee expressed satisfaction that Pakistan currently maintains adequate stocks of petroleum products, indicating no immediate risk of supply disruption. Nevertheless, members underscored the necessity for continuous vigilance given the rapidly changing regional context.
To ensure prompt responses and effective coordination, a working group will monitor daily developments, and the full committee will convene weekly to review the situation and submit recommendations to the Prime Minister.
The Petroleum Division has been designated to provide secretarial support and ensure the effective implementation of the committee’s mandate. The statement affirmed the government’s unwavering commitment to maintaining energy security, stabilizing markets, and safeguarding national interests during this critical period.
The committee has been tasked with closely monitoring the forward/futures prices of petroleum products and the predictability of the supply chain in light of the ongoing conflict, in addition to determining the foreign exchange implications of price volatility for the short and medium term.
