Pakistan’s oil industry has asked the State Bank of Pakistan to extend a temporary import relaxation. The extension would help avoid potential fuel supply disruptions amid ongoing global uncertainty and high shipping risks. The Oil Companies Advisory Council, representing over three dozen oil firms and refineries, has requested a two-month extension. Without this relief, a fuel supply crisis could hit the country as early as May 10, when the current facility expires.

The relaxation allows companies to import petroleum products on a cost, insurance, and freight basis. This helps them manage risks linked to volatile global conditions. The facility initially granted 60 days of relief after the industry flagged serious challenges in securing marine and war risk insurance. Rising geopolitical tensions in the Middle East, specifically the US-Israel conflict with Iran, have made shipping routes through the Persian Gulf and the Strait of Hormuz increasingly risky. Insurers have either withdrawn coverage or sharply increased premiums. A fuel supply crisis would paralyze transport and power generation.

Oil Industry Warns of Empty Pumps Ahead

The industry said the temporary relief has proven critical for enabling refineries and oil marketing companies to secure fuel cargoes during extreme uncertainty. However, conditions have not improved. Insurance costs remain high, freight rates stay elevated, and shipowners and suppliers remain cautious. The council warned that ending the relaxation at this stage could disrupt fuel supply chains, particularly as demand rises in the coming months. A fuel supply crisis during peak summer would worsen existing electricity shortages.

The SBP must decide before May 10. The industry urges extension until market conditions stabilize. Without action, Pakistani consumers could face empty pumps and longer blackouts.