Senate panel reviews petroleum reserves, fuel pricing and supply chain amid regional tensions

The Senate Standing Committee on Petroleum on Monday reviewed the country’s petroleum reserves, fuel pricing mechanism and supply chain situation amid ongoing tensions in the Middle East, with officials assuring lawmakers that Pakistan currently holds sufficient stocks of petrol and diesel.

The meeting was chaired by Senator Umar Farooq and attended by Federal Petroleum Minister Ali Pervaiz Malik, Petroleum Division officials and committee members.

During the briefing, the petroleum minister said the government had been continuously reviewing the petroleum situation since the outbreak of war in the Middle East.

“Since the Middle East war began, petroleum products have been under constant review,” Ali Pervaiz Malik told the committee, adding that monitoring of petroleum supplies was being conducted on a daily basis.

The minister said the government had also ensured the availability of fertilizer and maintained uninterrupted LPG imports through land routes despite regional uncertainty.

Officials of the Petroleum Division informed the committee that most of Pakistan’s crude oil imports originate from Saudi Arabia and the United Arab Emirates, while diesel is largely imported from Kuwait. Petrol imports mainly come from the UAE and Oman.

The petroleum minister acknowledged the support extended by Saudi Arabia and Abu Dhabi in ensuring petroleum supplies during the conflict period.

Committee member Saifullah Abro questioned the government over fuel price increases implemented after February 28, claiming the country already possessed adequate petroleum stocks at lower rates.

“You increased petrol and diesel prices by Rs55 per litre immediately after February 28 despite having stocks,” he said.

Saifullah Abro further stated that Pakistan had around 580,000 tonnes of petrol reserves at the time and alleged that petroleum companies earned significant profits from fuel purchased at comparatively lower prices.

Responding to the criticism, Ali Pervaiz Malik said maintaining petroleum stocks remained necessary due to global market uncertainty and pledged to provide detailed data of all companies to the committee.

“We had to maintain oil stocks as well,” the minister said, adding that the Federal Investigation Agency (FIA) was also examining the matter.

During the meeting, Petroleum Division officials informed lawmakers that Pakistan currently possesses petrol reserves sufficient for 30 days and diesel stocks for approximately 27 days.

The committee was also informed that Pakistan does not maintain strategic petroleum reserves at the state level and that petroleum stocks are instead held by private companies and oil marketing firms.

Ali Pervaiz Malik told the committee that expensive petroleum products also had to be purchased at times to ensure uninterrupted supply and market stability.

The minister further revealed that fuel pricing, particularly petrol and diesel prices, would eventually be deregulated.

Discussing international market trends, Petroleum Division officials stated that diesel prices in the global market had surged sharply after March 1, reaching as high as $285 per barrel, while petrol prices rose to around $150 per barrel.

However, the petroleum minister clarified that Dubai crude oil prices never reached $170 per barrel and diesel prices did not actually climb to $285 per barrel, indicating discrepancies in some reported figures.

The committee was also informed that an LNG cargo from Qatar is expected to arrive in Pakistan on Tuesday.

Questioning LNG procurement decisions, the petroleum minister remarked, “Why should we buy spot LNG at $20 per MMBTU?”

Committee member Amir Waliuddin Chishti called for a comprehensive audit of all oil marketing companies operating in the country.

Supporting the proposal, Ali Pervaiz Malik said all 42 oil marketing companies (OMCs) should be audited to ensure transparency and accountability in the petroleum sector.