Pakistan's Energy Security at Risk Amid Global Oil Market Volatility

Petroleum prices in Pakistan have long been an economic indicator that affects inflation, industrial competitiveness, government revenues, and living costs. The country has accelerated reforms by moving towards deregulation of the petroleum sector while facing unprecedented volatility in global oil markets.

While deregulation can improve market efficiency and attract investment, it also exposes consumers and businesses to fluctuations in international crude oil prices. Pakistan remains heavily dependent on imported petroleum to meet its energy needs, with domestic refineries satisfying only part of national demand.

The country's vulnerability became evident during the global oil market turbulence between 2020 and 2022. During this period, Brent crude prices briefly fell below $20 per barrel but later surged above $120 per barrel in 2022, demonstrating Pakistan's limited ability to shield its economy from external shocks.