What happened
Pakistan plans to boost domestic storage for crude oil and refined products to increase its energy security, according to a government document that was shared with oil producers and some of the world’s leading trading firms and reported on 26 May 2026.
The energy ministry proposed building strategic petroleum reserves as well as commercial storage through bonded terminals, refineries and oil marketing companies, according to the document. It also pushed for more oil and gas exploration and production, upgrades to the country’s refineries and a consolidation of its downstream sector. “Pakistan’s oil security requires both emergency reserves and stronger local supply capacity,” the ministry said in the document.
The proposed framework was shared with Saudi Aramco, Abu Dhabi National Oil Corp, Kuwait Petroleum Corp, QatarEnergy and PetroChina, as well as oil trading firms Vitol and Trafigura and storage operator Vopak.
Why it matters
Pakistan depends on supplies through the Strait of Hormuz for up to 90 per cent of its oil and liquefied natural gas imports but has no strategic petroleum reserves, leaving it exposed to supply shocks provoked by the Iran war while its lending programme with the International Monetary Fund limits room for costly state-owned emergency stocks. The document cited constrained port infrastructure, limited ship-to-ship capacity and insufficient storage among the country’s vulnerabilities.
Financing and stockholding rules
Under the bonded storage plan, international suppliers and traders would be allowed to hold petroleum stocks in Pakistan, creating commercial inventories that could support domestic supply during emergencies, and the government could also allow companies to store fuel for re-export. The ministry wants the bonded storage framework for suppliers to be finalised by June.
The build-up of the government’s own strategic reserves would be paid for by a ring-fenced fund financed by 10 rupees per litre from the existing levy on petroleum, with allocations to start on 1 July. The document says that allocation would generate about 700 million dollars a year.
The plan would also require refineries to hold 15 days of crude stocks and oil marketing companies to maintain 30 days of finished products, with the rules to be phased in through refinery policy, margin revisions and downstream consolidation by June 2028. It calls for an energy infrastructure corridor around the city of Hub and Port Qasim, including single-point mooring, storage and pipeline connectivity, to reduce reliance on smaller, costlier shipments.
Minister’s caution
Petroleum Minister Ali Pervaiz Malik said the previous week that building reserves was “easier said than done”, especially for a country in an IMF programme with severe fiscal challenges, but added that the government was trying to move quickly from planning to implementation.
Sources & reporting notes
This is a summary of published reporting, not independent reporting. Quotations are as carried by the cited outlets. Sources reviewed on 2026-05-26.
- Dawn — "Islamabad plans oil reserves, storage push" (Reuters)First published 26 May 2026 · Reports the government document, the firms it was shared with, the funding plan and the proposed stockholding rules.
- Arab News — "Pakistan plans oil reserves, storage push as Hormuz constraints expose vulnerabilities" (Reuters)26 May 2026 · Adds the refinery and oil-marketing stockholding timelines and the Hub and Port Qasim corridor proposal.
