In light of the current situation in the Gulf region following recent events, the Oil and Gas Regulatory Authority (Ogra) has instructed oil companies to uphold the mandatory 20-day fuel stocks requirement.

Ogra has emphasized to oil marketing companies (OMCs) the importance of staying alert during this crisis and ensuring a continuous supply of petroleum in the upcoming days by meeting the minimum stock criteria outlined in the Pakistan Oil Rules of 2016.

Out of the 19 OMCs in the country, only Pakistan State Oil (PSO) and GO, a joint venture with Saudi Arabia, are currently in compliance with this regulation.

Pakistan has approximately 11,000 fuel stations nationwide, with many OMCs storing key motor fuels at these locations. The main petroleum fuels in the country are petrol and diesel, with an estimated consumption of 1.5 million tonnes each in June and a similar projection for July.

Responding to inquiries, Ogra has assured that the country has an adequate supply of petroleum products to meet current demands. However, as a precautionary measure, Ogra has advised all OMCs to maintain their 20-day stock levels to prepare for potential future needs and market conditions.

A high-level committee, led by the Prime Minister and composed of key federal ministries' representatives, regulatory bodies, and energy sector experts, has been established to monitor petroleum product pricing and supply in response to the evolving geopolitical situation.

The committee's first meeting has already taken place, with another session scheduled for the following week. The Petroleum Division has proposed utilizing storage facilities at non-operational power plants to build reserves, with a capacity of up to one million tonnes of furnace oil.

As tensions escalate in the Middle East, the government and industry stakeholders are exploring alternative arrangements to secure oil supplies. Options being considered include importing oil from Saudi Arabia and the UAE through alternative routes if the Strait of Hormuz is closed.

The Strait of Hormuz is a critical passage for global crude oil shipments, handling over 20% of these shipments. Any disruption could impact global oil supplies, including those in Pakistan, leading to a surge in crude oil prices and its derivatives.

The Institute of Cost and Management Accountants of Pakistan (ICMAP) has released a policy-focused assessment of the potential economic consequences of the conflict between Iran and Israel. The report highlights the need for Pakistan to increase its strategic petroleum reserves and adopt Shariah-compliant oil price hedging instruments to manage international price volatility.

ICMAP also recommends diversifying oil procurement through local currency trade agreements with key countries and promoting clean energy initiatives to enhance long-term energy resilience.