The ongoing war in the Middle East has created fresh economic pressure for Pakistan, which is already struggling with financial challenges. With the conflict threatening a prolonged closure of the Strait of Hormuz — a crucial route through which Pakistan receives much of its oil — the government led by Shehbaz Sharif has decided to adopt austerity measures to conserve fuel. As part of this effort, authorities are considering Covid-era steps such as work-from-home arrangements and online classes to reduce the number of vehicles on the roads.
The move comes just a day after Pakistan adopted a tough stance on Iran. The country’s foreign minister indicated that Pakistan could be drawn into the conflict, referring to its defence pact with Saudi Arabia that treats an attack on one as an attack on both. Ishaq Dar also claimed that Pakistan had issued a warning to Iran.
However, the conflict is something Pakistan can hardly afford given its fragile economic condition and heavy dependence on foreign loans. At the same time, the country is also dealing with tensions along its border with Afghanistan.
The situation is particularly worrying because the conflict could affect not only oil supplies but also remittances. More than 4.7 million Pakistani citizens live and work in Gulf countries. For now, the immediate concern is Iran’s closure of the Strait of Hormuz, through which nearly a fifth of the world’s oil supply passes, along with most of Pakistan’s fuel imports.
In response, Pakistan has started preparing measures to save energy. According to a report in Dawn, the government is considering allowing employees to work from home and shifting schools and colleges to online classes, similar to the steps taken during the Covid-19 pandemic.
Authorities are also thinking about limiting office attendance so that only essential staff report to workplaces during March. Telecom and IT companies have been asked to consider permitting employees to work remotely at least twice a week.
Another proposal under discussion is promoting ride-sharing among office workers, all aimed at reducing fuel consumption.
At present, Pakistan has petrol and diesel reserves that can last around 25 days, about 10 days of crude oil supplies, and roughly 15 days of LPG stocks, according to Finance Minister Muhammad Aurangzeb.
The government is also planning additional measures, including revising petroleum prices every week and providing compensation to oil companies. Weekly price revisions are expected to discourage hoarding by fuel dealers.
At the same time, contingency plans are being prepared. Pakistan has already requested Saudi Arabia to route oil supplies through the Red Sea port of Yanbu following the closure of the Strait of Hormuz.
The war has also created difficulties for oil companies, as both shipping and insurance costs for oil cargo have increased sharply. To prevent major disruptions in supply, the government may need to compensate companies for these additional expenses.
The developments highlight how vulnerable Pakistan’s economy remains to global energy shocks, especially during periods of geopolitical instability.
