Pakistan could significantly reduce its annual oil import bill if it begins purchasing crude oil from Iran after international sanctions are eased, according to a new research report.
The study estimates that Pakistan may save between $170 million and $340 million each year if it imports 10% to 20% of its crude oil needs from Iran
The savings would come from lower crude prices as well as reduced transportation costs because of the two countries’ shared border.
Pakistan currently spends around $17 billion annually on petroleum products and fuel imports.
Analysts believe buying discounted Iranian crude and refining it locally could help lower import costs and reduce pressure on the country’s foreign exchange reserves.
Before tighter international sanctions were imposed in 2012, Pakistan imported Iranian crude at discounted prices. With recent discussions over sanctions relief, the possibility of resuming those imports has returned.
However, any final decision will depend on international sanctions, banking channels, payment mechanisms and government policy.
Petroleum Minister Ali Pervaiz Malik has confirmed that the government is reviewing the option of importing cheaper oil and gas from Iran.
Officials say the move could strengthen Pakistan’s energy security while reducing fuel costs if the necessary international conditions are met.
