Pakistan Warns of Potential Fuel Rationing Amid US-Iran Conflict
Pakistan could be compelled to consider implementing fuel rationing at petrol pumps if the ongoing military confrontation between the United States and Iran continues for an extended period, according to Finance Minister Muhammad Aurangzeb. The minister delivered this stark warning during his participation at the World Bank–IMF Spring Meetings 2026 held in Washington, DC.
Government Prefers Price Mechanism Over Rationing
Aurangzeb indicated that while Islamabad has thus far avoided imposing rationing measures, the situation remains highly fluid and entirely dependent on how the conflict evolves in the coming weeks and months. "So far we have stayed away from interventions at the gas stations and at the petrol pumps… from our perspective that’s a much better way to go than going into rationing," he stated, responding to direct questioning about whether Pakistan might impose fuel restrictions.
The minister elaborated that the government is currently relying on price adjustments and targeted subsidies to manage demand, rather than imposing strict supply controls that could lead to unrest. "What we've seen is it has led to law and order situations in other countries," he explained, referencing rationing measures implemented elsewhere that resulted in public disturbances.
"If demand destruction can be done through price transmission combined with targeted subsidies… that’s a much better way to go," Aurangzeb emphasized. However, he added a significant caveat: "I have to put an asterisk there, it all depends how long this goes and how far this goes." This statement clearly signals that rationing remains a fallback option should the crisis deepen substantially.
Oil Crisis Driven by Hormuz Disruption
The warning comes amid heightened global energy volatility triggered by the US-Iran war, which has severely disrupted oil supplies through the strategically vital Strait of Hormuz. This narrow waterway serves as a crucial transit route for nearly one-third of global oil flows, making any disruption there particularly damaging to energy markets worldwide.
Pakistan finds itself especially vulnerable to these supply shocks and resulting price increases, as the nation imports approximately 85% of its fuel through the Strait of Hormuz. The country has already witnessed sharp fuel price hikes in recent weeks, sparking public protests and forcing the government to partially roll back some increases in response to mounting pressure.
Rising Prices and Public Pressure Shape Policy
Petrol prices in Pakistan surged by over 40% earlier this month before being partially reduced following significant public backlash. This dramatic price spike pushed transportation costs substantially higher and triggered unrest in several regions across the country.
To cushion the economic impact on vulnerable populations, the government introduced targeted subsidies for key groups including transporters, farmers, and other essential sectors. Additional relief measures included implementing free public transportation in some urban areas to help mitigate the burden on commuters.
Aurangzeb’s remarks highlight the delicate balancing act facing Islamabad as it attempts to manage dwindling energy supplies while simultaneously avoiding widespread public unrest. The ongoing Middle East conflict continues to cast a long shadow over global oil markets, creating uncertainty for energy-importing nations like Pakistan that depend heavily on stable international supplies.
The situation remains precarious, with Pakistan's energy security now directly tied to geopolitical developments far beyond its borders. As the US-Iran conflict persists, Pakistani authorities must navigate complex economic pressures while maintaining social stability in a nation where fuel prices directly impact millions of livelihoods.
