Pakistan's fuel import bill rises to $7.9 billion

Petroleum import bill rose from $983 million in March to $1.28 billion in July, peaking at nearly $1.91 billion in June as higher oil, LNG, freight and insurance costs increased the foreign-exchange burden Pakistan's petroleum import bill increased by nearly 20% to around $7.7-$7.9 billion during the five months from March to July 2026, compared with about $6.6 billion in the corresponding period of 2025, as the Iran war and disruption of shipping through the Strait of Hormuz pushed up energy costs across South Asia. Official trade data show that Pakistan's petroleum import bill rose from around $983 million in March to $1.28 billion in July, after reaching nearly $1.91 billion in June. The sharpest year-on-year increase was recorded in April, when the petroleum import bill rose to around $1.79 billion from $1.35 billion a year earlier. The bill remained elevated in May before reaching nearly $1.91 billion in June, representing an increase of about 46% YoY. The pressure eased in July, when the petroleum-group import bill fell to around $1.28 billion from June's level. Despite the monthly decline, imports during March-July remained substantially higher than in the same period of 2025. Higher LNG costs added to the pressure. Pakistan's petroleum-group imports in June included around $221.5 million worth of LNG, further increasing the foreign-exchange burden. The disruption of energy shipments through the Strait of Hormuz has raised crude and LNG prices as well as freight, marine insurance and security costs, increasing the overall landed cost of energy cargoes. The latest increase follows an already higher petroleum import bill in FY2025-26. Pakistan's petroleum-group imports reached approximately $16.86 billion during the fiscal year, up 5.76% from the previous year, while crude oil imports increased by more than 31%. The impact has extended across South Asia and other major energy-importing economies. According to data from Finland-based climate think tank Centre for Research on Energy and Clean Air (CREA), the war involving the United States, Israel and Iran increased the global oil and gas import bill by as much as $330 billion over the six months from March to August 2026. Europe recorded the largest increase at $78 billion, followed by China at $35 billion and India at $22 billion, reflecting the impact of higher energy costs on major importers. India has faced a particularly large increase in absolute terms because of its substantial crude oil import requirements. Its crude oil import bill rose 56.5% to $63.4 billion during April-July 2026, despite broadly stable import volumes, as the average price of imported crude increased. India's crude import price reached approximately $114.48 per barrel in April, compared with $67.70 a year earlier. Its oil import bill stood at around $13.7 billion in July alone, up about 41% year-on-year. India imports roughly 88% of its crude oil requirements, leaving its economy highly exposed to international oil prices and disruptions to Middle Eastern supply routes. The higher crude cost has also increased pressure on the country's merchandise trade balance. Bangladesh has faced a similar energy-cost shock. Bangladesh Bank data show that petroleum-goods imports more than doubled to $10.64 billion in FY2025-26 from $5.14 billion a year earlier, with crude petroleum imports rising 92% and petroleum, oil and lubricants (POL) imports increasing 109%. The Iran war and disruption in the Strait of Hormuz subsequently intensified Bangladesh's LNG costs. Petrobangla replaced planned long-term supplies with more expensive spot cargoes, with 25 of the 37 LNG cargoes scheduled for March-June ultimately sourced from the spot market at $20-$28 per MMBtu. CREA estimates that Asian LNG prices averaged 75% above pre-war expectations during March-August 2026. Bangladesh purchased 11 LNG cargoes for March-May at an average price of $21.35 per MMBtu, costing around $880 million, with the price roughly twice pre-war levels. Dhaka has also sought alternative sources of refined petroleum from China, Singapore, Malaysia, Indonesia and India as conventional supply routes were disrupted. Bangladesh has said around 20%-23% of its imported fuel oil passes through the Strait of Hormuz, highlighting the country's exposure to a prolonged disruption of the waterway. Across South Asia, the energy shock has therefore emerged as an economic issue extending beyond the Middle East conflict, with higher import bills putting pressure on foreign-exchange reserves, inflation and external balances.