KARACHI: The oil transportation and storage sector in Pakistan is set for expansion, driven by increased petroleum demand and relaxed import restrictions, according to a study by the Pakistan Credit Rating Agency (Pacra). The report highlights that pipelines, recognized as cost-effective and environmentally friendly, are essential for both domestic and cross-border oil transport.
Pakistan’s oil pipeline network, spanning over 2,000 kilometers, transports High-Speed Diesel (HSD), Motor Gasoline (Mogas), and crude oil. Road transport remains the dominant mode of oil movement, accounting for 69% of total transport, while pipelines handle 29%, and railways cater to the remaining 2%.
The study underscores the sector’s strategic importance, noting that the expansion of the pipeline network, including the planned connection from Karachi to Peshawar, will bolster the energy system, particularly in the northern regions. Additionally, fixed tariffs and USD indexation provide revenue stability, while the sector’s growth is closely tied to increasing transport volumes.
Story by Tanveer Malik
