Pakistan’s oil import costs have surged to record levels after supply disruptions linked to the conflict in the Middle East pushed up premiums on petroleum cargoes, raising the risk of a steep increase in domestic diesel prices.

Pakistan State Oil has warned that recent imports were made at unprecedented premiums as shipments through the Strait of Hormuz, one of the world’s most important oil transit routes, came under pressure. Premiums that had been hovering around $12 per barrel have now climbed above $34 to $35 per barrel, according to the company.

In a letter to the Oil and Gas Regulatory Authority, PSO said a recent cargo of high-speed diesel carried a premium of $35.612 per barrel and cautioned that upcoming shipments were likely to face similarly elevated costs.

If the full increase is passed on, the ex-refinery price of diesel could rise by about Rs122.76 per litre from the current Rs496.97 per litre, potentially leading to a sharp jump in retail prices.

PSO has asked regulators not to transfer the entire burden to consumers. The company proposed that only part of the exceptional cost be reflected in fuel prices, while the remaining amount be reimbursed through existing adjustment mechanisms.

According to PSO’s estimates, if authorities calculate prices using premium levels seen before the Middle East conflict, the increase in diesel prices could be limited to around Rs60 per litre. If more recent benchmark levels are used, the rise may be contained to roughly Rs40 per litre.

The company has also suggested using the inland freight equalisation margin mechanism to bridge the remaining cost gap and cushion consumers from the full impact of the import shock.

Delayed payments to oil marketing companies have compounded the pressure on the oil supply chain, although the government has recently released about Rs38 billion under the Price Differential Claims mechanism to ease liquidity constraints.