Prolonged conflict may disrupt energy supply chain

ISLAMABAD: A committee constituted to monitor petroleum prices in the wake of the emerging regional situation has warned that a prolonged conflict could have implications for Pakistan’s energy supply chain.
The committee met at the Finance Division under the chairmanship of Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb.
The body undertook a comprehensive stocktaking exercise and deliberated on matters within its mandate. Members reviewed forward and futures price trends of petroleum products, assessed the resilience of regional and international supply chains amid evolving geopolitical developments, and examined potential short- and medium-term foreign exchange implications of price volatility.
The committee also evaluated measures to prevent supply disruptions while ensuring uninterrupted domestic availability of petroleum products, and considered the possible fiscal impact of a prolonged conflict.
A detailed assessment of global oil market conditions was presented, including movements in international benchmarks, freight and insurance costs, shipping route dynamics and alternative sourcing options. Various supply and pricing scenarios were examined to ensure preparedness under different contingencies.
The committee was informed that national petroleum stocks are currently at comfortable levels. The finance minister emphasized that there is no immediate supply stress and that maintaining market confidence and orderly conditions remains essential. While acknowledging that the international environment is fluid, he noted that Pakistan’s energy supply chain remains stable and fully functional.
The committee observed that any closure of the Strait of Hormuz or escalating tensions around the Bab al-Mandeb would pose significant challenges to global energy security and could affect Pakistan if the situation persists.
The finance minister stated that the committee would function as a strategic governance forum to continuously monitor developments and undertake structured scenario planning. He underscored that ensuring uninterrupted energy supplies nationwide remains the government’s primary objective.
He directed all relevant entities to enhance coordination, verify physical stock positions, closely monitor shipments and storage, and remain prepared to respond to emerging developments.
The minister further emphasized that any decisions taken would be implemented with clarity and transparency. Pricing implications arising from international market movements, where unavoidable, would be addressed through established mechanisms in a predictable and orderly manner to avoid distortions or abrupt adjustments.
The meeting also reviewed LNG and LPG supply positions, shipment schedules, terminal operations and line-pack levels. Relevant ministries were tasked with refining comparative scenario assessments, including economic and fiscal trade-offs associated with alternative fuel utilization and demand management measures.
To ensure continuous oversight, it was decided that the committee would meet daily, supported by structured data consolidation and formal review. This mechanism will enable real-time monitoring of international prices, domestic stock levels, foreign exchange exposure and supply chain developments.
Concluding the meeting, the finance minister reaffirmed that the government is closely monitoring the situation at the highest level and that proactive measures are in place. He assured the public and market participants that there is no cause for concern, as energy supplies remain stable and contingency planning is actively underway.
The meeting was attended by Federal Minister for Petroleum Ali Pervaiz Malik, Federal Minister for Power Sardar Awais Ahmad Khan Leghari, Minister of State for Finance Bilal Azhar Kayani, along with federal secretaries and senior officials from relevant ministries and regulatory bodies.