Syed Saif Ul Hassan 
Sep 29, 2025
While Pakistan is bracing for an expected fuel price hike, a fuel crisis is also reportedly looming over Pakistan and is likely to take effect in February as banks halt financing for imports led by dwindling foreign exchange reserves.
The fuel shortage impending in Pakistan comes in the midst of the country grappling with a balance of payments crisis, let alone the rapidly falling value of the Pakistani rupee, which is also making imported goods more expensive. It's worth noting that energy makes up a significant portion of Pakistan's import bill.
Pakistan mostly relies on imported natural gas to meet over a third of its annual power demand, but prices have surged since Russia's invasion of Ukraine, Reuters reported, citing traders and industry sources.
A senior oil company official warned: “If we don’t have LCs (letters of credit) open right now, we might see shortages in the next fortnight.”
The development follows petrol and diesel prices rising by 16% to 249.80 Pakistani rupees ($0.9373) per litre.
State-owned Pakistan State Oil (PSO) and Pakistan LNG Ltd have left many fuel tenders unawarded recently.
Officials from the State Bank of Pakistan noted “severe liquidity issues” during an industry meeting, causing delays in opening LCs. The managing director of PSO noted that a gasoline cargo bound for loading was cancelled due to these delays.
Pakistan’s Oil Companies Advisory Council has also warned that without the timely opening of LCs, critical petroleum imports could be jeopardised, potentially leading to fuel shortages.
