Pakistan's oil industry seeks import extension amid Middle East turmoil

The Pakistani oil industry is urgently seeking a two-month extension on the permission to import petroleum products on a cost, insurance, and freight (CIF) basis. This plea, directed at the State Bank of Pakistan, highlights the persistent volatility in the Middle East, which continues to disrupt shipping and insurance markets. The Oil Companies Advisory Council (OCAC) emphasizes that the current geopolitical situation, marked by the US-Israel war on Iran, has made securing adequate marine and war-risk insurance prohibitively expensive and difficult. Shipowners and suppliers remain reluctant to operate in the region, driving up freight rates and premiums. The industry argues that extending the CIF arrangement is crucial for maintaining uninterrupted fuel supplies, a matter of national energy security, especially with upcoming seasonal demand. Failure to secure this extension could lead to considerable challenges in sustaining supply chains, impacting the availability of essential petroleum products for Pakistan.

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the situation in the region remains volatile with no meaningful de-escalation or restoration of normal shipping and insurance conditions. The constraints highlighted earlier — particularly the limited availability and exorbitant cost of marine and war-risk insurance, coupled with continued reluctance of shipowners and suppliers — still persist. Freight rates and war-risk premiums continue to remain elevated, and the operational challenges in executing imports under cost and freight arrangements have not eased.