Pakistan allows import of low-grade diesel to meet harvest demand

Pakistan has allowed the import of lower-grade high-speed diesel to address supply needs ahead of the harvest season, reversing a restriction in place for nearly a decade, Dawn reported. 

The decision was taken by a cabinet committee on petroleum prices, which approved a temporary exemption for importing 500ppm sulphur diesel, commonly referred to as Euro-II/III standard, due to limited availability and higher cost of 10ppm Euro-5 diesel in the market.

Pakistan had phased out 500ppm diesel imports starting in 2015, with full implementation by 2017, after suppliers upgraded refining capacity to provide cleaner Euro-5 fuel. 

However, officials said current supply constraints and seasonal demand have led to a temporary relaxation of specifications.

Authorities informed the committee that diesel demand typically increases during the April–May harvest period, requiring higher stock levels to ensure market stability and prevent shortages.

State-run Pakistan State Oil has already arranged a cargo of 500ppm diesel, which offers a lower import premium of around $6–7 per barrel compared to $26–27 per barrel for Euro-5 diesel.

The committee also directed relevant authorities to obtain clearance from Iran to route shipments through the Strait of Hormuz for fuel imports from Kuwait. Officials said such approval would help reduce insurance costs and facilitate smoother shipping operations.

The move is aimed at securing timely fuel supplies, managing costs, and maintaining adequate stock levels during the peak demand period.