The government recently announced a sharp increase of Rs55 per litre in petrol and diesel prices due to rising global oil costs linked to instability in the Middle East. Petrol now costs Rs321.17 per litre, while diesel has risen from Rs275.70 to Rs335.86 per litre.

Calls to import Russian oil have increased after Iran effectively halted shipments through the Strait of Hormuz, threatening nearly one-fifth of the global oil supply.

However, Ali Pervaiz Malik said there are major challenges in procuring Russian crude. He explained that Russian Urals is a very heavy crude, which most of Pakistan’s older hydroskimming refineries, except the Pak-Arab Refinery Company (PARCO), cannot process efficiently.

“When heavy crude is refined in hydroskimming refineries, it produces a large amount of furnace oil,” he said. Under the International Monetary Fund’s Resilience and Sustainability Facility (RSF), furnace oil is taxed because it is highly polluting, making Russian oil imports commercially unviable.

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The minister added that the government is in talks with the IMF to remove levies on fuel under the RSF and the Extended Fund Facility (EFF) to allow alternative fuels to be consumed locally and support the gas sector.

He also noted that LNG supplies from Qatar have been suspended, forcing Pakistan to consider generating electricity from furnace oil to meet energy needs.

“For that reason, Russian crude is never commercially viable because our refineries are not upgraded to handle heavy oil,” Malik said.