The federal government has temporarily barred private oil marketing companies from importing high-speed diesel, allowing only Pakistan State Oil to continue procurement as authorities attempt to manage rising external payment pressures and growing uncertainty in global energy markets.
The decision was taken during a recent meeting of the National Coordination and Management Council and will remain effective until the regional security situation in the Middle East stabilises, according to officials familiar with the discussions.
Under the revised arrangement, private oil marketing companies seeking to import high-speed diesel will now require prior approval from the council before placing orders.
Officials say the move is intended to strengthen oversight of fuel imports, regulate foreign exchange usage, and ensure supplies remain aligned with domestic demand.
The restriction comes at a time when international oil markets remain volatile due to tensions surrounding key Middle Eastern energy routes and concerns over possible disruptions in global fuel supplies.
Govt Moves to Control Import Bill
Officials described the policy as a temporary but strategic intervention aimed at easing pressure on Pakistan’s external account.
Pakistan’s fuel import bill remains among the country’s largest sources of foreign exchange outflow. Authorities believe centralising diesel imports through PSO will improve procurement planning and help avoid unnecessary import volumes during a period of market uncertainty.
Also read: Over Rs669bn financial irregularities revealed in PSO
A senior Petroleum Division official, speaking after the meeting on May 6, 2026, said the government wanted “greater coordination between fuel imports, available reserves, and projected domestic consumption”.
The official added that the arrangement would allow authorities to monitor inventory levels more effectively while avoiding excessive pressure on dollar reserves.
According to State Bank of Pakistan data released in March 2026, Pakistan’s import payments for petroleum products remained a major contributor to the widening trade gap during the current fiscal year.
Private Oil Companies Raise Concerns
Executives from private oil marketing firms expressed reservations over the decision, warning that restricting participation in diesel imports could affect supply chain efficiency and reduce competition in the domestic fuel market.
Industry representatives argued that private sector participation has historically supported timely fuel availability, particularly during periods of increased transport and agricultural demand.
Some officials within the sector also warned that relying heavily on a single importing entity could create logistical bottlenecks if consumption rises sharply during the summer months.
However, government officials said the policy still allows flexibility. Private oil marketing companies can seek special approval from the council in cases involving emergency shortages or exceptional market demand.
Energy analyst Dr. Fahad Rauf said on May 7, 2026, that the government’s decision reflects broader concerns over Pakistan’s balance-of-payments position and vulnerability to external shocks.
“When oil prices rise suddenly, Pakistan’s import costs increase almost immediately. Authorities are trying to prevent additional stress on foreign exchange reserves,” he said.
Regional Tensions Add Pressure
The move comes amid renewed instability in the Middle East, which has triggered concerns across global commodity markets and raised fears of supply disruptions through major oil transit routes.
International crude prices have experienced sharp fluctuations in recent weeks as geopolitical tensions intensified across the Gulf region.
Also read: PSO Appoints Jawwad Ahmed Cheema as CEO for Three-Year Term from May 2026
Pakistan, which relies heavily on imported petroleum products to meet domestic energy demand, remains particularly exposed to sudden changes in global oil prices.
In major urban centres including Karachi, Lahore, and Faisalabad, transport operators and industrial consumers are closely monitoring diesel supply trends amid concerns about possible future price adjustments.
Broader Energy Sector Challenges Continue
The restriction on private diesel imports also highlights Pakistan’s broader energy-sector vulnerabilities, including dependence on imported fuel, circular debt, and persistent pressure on foreign exchange reserves.
The government is simultaneously pursuing refinery upgrade projects, power-sector reforms, and fuel procurement adjustments as part of wider economic restructuring efforts linked to international financing commitments.
Officials insist the latest decision is temporary and aimed at maintaining stability during an uncertain period in global energy markets.
For now, PSO will remain the primary channel for high-speed diesel imports while authorities continue monitoring regional developments and domestic supply conditions.
