ISLAMABAD: The government has decided to fully pass on the impact of surging global oil prices to domestic consumers on a fortnightly basis as geopolitical tensions in the Middle East rattle energy markets. The decision comes amid rising inflation, which has climbed to nearly a 16 month high of 7 percent in February, adding pressure on households already grappling with higher living costs.

A cabinet committee on petroleum price monitoring, chaired by Finance Minister Muhammad Aurangzeb, reviewed the volatile situation and resolved that international market movements will be reflected through established pricing mechanisms to avoid abrupt distortions. The government recently raised petrol prices by Rs8 per litre and diesel by Rs5.2 per litre, while continuing to charge up to Rs82 per litre in petroleum levy.

Brent crude surged over 10 percent to cross 82 dollars per barrel after fresh attacks near the Strait of Hormuz heightened supply fears. Natural gas prices also spiked by up to 25 percent as tensions escalated across the region, threatening critical shipping routes that handle nearly one fifth of global oil and gas flows.

Officials said national petroleum stocks remain comfortable and can meet demand for up to four weeks. However, the committee warned that prolonged closure of key waterways including Hormuz and Babb Al Mandeb could disrupt Pakistan energy supply chain and push import costs sharply higher.

Scenario analysis presented to the committee showed that if crude prices rise to 100 dollars per barrel, the monthly fuel import bill would increase by 300 million dollars. At 120 dollars per barrel, the additional burden could reach 500 million dollars, straining foreign exchange reserves.

The committee will now meet daily to track futures prices, freight costs and supply routes while assessing fiscal and external account implications. Officials stressed that while no immediate supply stress exists, sustained volatility could test Pakistan fragile economic recovery.