Kerosene and jet fuel prices for Pakistan’s armed forces and Hajj flights have been frozen as the country begins facing financial pressure from the ongoing US and Iran conflict. Local oil refineries agreed to provide fuel at old rates despite rising international oil prices and increasing import costs.
According to official sources, refineries will continue supplying kerosene oil and jet fuels at the prices that were effective on March 1, 2026. The arrangement will remain in place until June 30, 2026, covering the remaining months of the current fiscal year.
The decision came after the government informed refinery officials that the armed forces required fuel support because of growing regional tensions and the sharp increase in global oil prices.
Sources said the refineries would collectively bear losses of nearly Rs8 billion due to the discounted fuel supply. However, the companies agreed to support national security operations and Hajj flights during the ongoing energy crisis.
In an official letter sent by the Petroleum Division to refinery chief executives, the government confirmed that local refineries had agreed to provide SKO and JP 8 fuel to Pakistan’s armed forces and Air Force at March 1 prices. The agreement also included JP 1 fuel for Hajj flights at the same rates.
The letter stated that the issue was discussed during meetings of the National Crisis Management Cell and follow up discussions with refinery chief executives on May 11, 2026.
Pakistan Army is one of the country’s largest users of kerosene oil, particularly in remote northern regions where fuel demand increases because of harsh weather and operational requirements.
The ongoing US and Iran war has disrupted global energy markets and caused a sharp increase in jet fuel prices worldwide. Several international airlines have already reduced or suspended operations because of rising fuel costs and operational uncertainty.
Pakistan has also started feeling the impact of the global fuel crisis. Petrol and diesel prices in the country have crossed Rs400 per litre, increasing transportation costs and adding pressure on households and businesses.
Economic experts warn that Pakistan remains highly vulnerable to international oil shocks because the country imports nearly 80 percent of its petroleum requirements from Middle Eastern countries.
Major oil suppliers to Pakistan include Saudi Arabia, United Arab Emirates, and Kuwait.
Officials said Kuwait recently resumed diesel exports to Pakistan to help the country avoid a major fuel shortage as tensions continue in the Gulf region. Saudi Arabia also continues supplying petroleum products to Pakistan under deferred payment arrangements.
Prime Minister Shehbaz Sharif recently warned that Pakistan’s oil import bill had surged dramatically because of the conflict. He said the weekly import cost increased from 300 million dollars to 800 million dollars within days.
Analysts believe the rising oil bill could create additional pressure on Pakistan’s foreign exchange reserves and inflation rate. They also fear that prolonged instability in the Middle East may further weaken the country’s economic position.
Government officials are closely monitoring the fuel situation while considering additional measures to ensure uninterrupted energy supplies across the country. Authorities are also reviewing strategies to control inflation and reduce pressure on consumers.
Industry experts say the refinery decision may provide temporary relief for defence operations and Hajj travel. However, they stress that Pakistan still faces long term energy security challenges because of its heavy reliance on imported oil.
The latest crisis has once again highlighted the urgent need for Pakistan to increase investment in local energy exploration and alternative energy projects to reduce dependence on expensive imported fuel.