Pakistan has taken a major decision to strengthen its energy security following the Middle East crisis, approving a plan to establish strategic petroleum reserves sufficient for one to three months.
In view of continuing tensions in the Middle East and fears of a possible energy crisis, preparations have begun for the establishment of strategic reserves of petroleum products across the country.
In the initial phase, authorities are preparing a plan for reserves covering one month of national demand. The project is expected to require nearly $1 billion in investment. Estimates suggested around $550 million will be spent on petroleum products, while more than $30 million will be allocated for storage facilities.
Sources in the Ministry of Petroleum said Saudi Arabia and Kuwait had expressed interest in investing in the project. Several countries, including Japan, have already established similar strategic petroleum reserves.
Officials said Pakistan currently possesses almost no government-owned petroleum reserves, while commercial stocks are sufficient for only about 21 days of demand. They said government reserves had become essential in the event of emergencies or disruption in the global market.
According to sources, strategic reserves and commercial stocks will be kept separate to ensure uninterrupted fuel supplies during any extraordinary situation. Friendly countries maintaining reserves in Pakistan would also be able to obtain oil supplies if required.
The Ministry of Petroleum said the decision formed part of Pakistan’s long-term energy security plan. Pakistan already has long-term petroleum import agreements with Qatar.
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