Govt mulls imposing speed limits to conserve fuel

KARACHI: The federal government is reviewing various austerity measures including imposing speed limits as part of Pakistan’s national fuel-saving plan amid oil supply disruptions in the Middle East following strikes by Israel and the United States on Iran.

Speaking to ARY News programme Aiteraz Hai, Federal Minister for Petroleum Ali Pervaiz Malik said the government’s plan has two key aspects.

“One is conservation, what habits we can adopt and how we can modify our lifestyle to reduce our energy footprint in daily routines,” he said.

Malik added that consultations have been completed with all provincial governments and the federal government will soon announce a series of measures. These may include imposing speed limits on vehicles to reduce fuel consumption.

“Fuel consumption is directly related to vehicle speed,” the minister said.

He noted that Pakistan had adopted several similar measures during the COVID-19 pandemic, including work from home policies and shifting educational institutions to online learning.

The government has already announced a significant increase of Rs55 per litre in the prices of petrol and diesel, citing rising global oil costs linked to escalating tensions in the Middle East.

Under the new rates, petrol is cost Rs321.17 per litre, while diesel rose from Rs275.70 to Rs335.86 per litre.

Meanwhile, various quarters in the country have called for the import of Russian oil after Iran effectively halted shipping through the Strait of Hormuz, threatening nearly one-fifth of global oil supplies.

However, Ali Pervaiz Malik said importing Russian crude is not a viable option, citing several challenges, including financial constraints.

“Russian Urals is a very heavy crude,” he said, adding that most refineries in Pakistan are old hydroskimming refineries, except for the Pak-Arab Refinery Company (PARCO).

“When heavy crude is refined in hydroskimming refineries, it generates a large amount of furnace oil,” Malik explained. A carbon levy is imposed on furnace oil under the International Monetary Fund’s Resilience and Sustainability Facility (RSF) because it is considered a highly polluting fuel.

“That changes the dynamics and viability of importing Russian Urals into Pakistan,” he added.

Malik said the government is engaging with the IMF on the issue, noting that global energy markets are currently facing intense demand.

“There is a rush for every molecule,” he said.

He added that Pakistan has requested the IMF to remove levies on fuel under the RSF and the Extended Fund Facility (EFF) so that alternative fuels can be consumed locally and to help address challenges in the gas sector.

According to Malik, LNG supplies from Qatar have been suspended, and the government is considering generating electricity from furnace oil to meet energy requirements.

“For that reason, Russian crude is not commercially viable because our refineries are not sufficiently upgraded,” he concluded.