Pakistan has asked for dedicated Saudi LPG shipments as winter nears. It is also offering Saudi firms tax-free oil storage on its soil.

Pakistan has asked Saudi Arabia for dedicated Saudi LPG shipments to cover the winter, after the land route that brought much of its LPG from Iran was closed by the regional conflict. Petroleum Minister Ali Pervez Malik made the request at a meeting with Saudi Ambassador Dr Rajeh Tami Albugamy, according to a ministry statement reported by The Express Tribune on Saturday. He also invited Saudi companies to hold commercial oil reserves in Pakistan without local tax liability. For households and small businesses already paying far above the official LPG price, supply is now the issue to watch.

The short version

• Pakistan asked Riyadh for dedicated LPG shipments and more crude through coordination with Saudi Aramco.
• A tax-neutral bonded storage policy, modelled on Fujairah and Singapore, would let Saudi firms keep oil reserves in Pakistan.
• OGRA’s official LPG price for November is Rs294 a kg, but LPG is reportedly selling at about Rs520 to Rs570 a kg in major cities.
• No volumes, prices or dates for the shipments have been announced.

What happened

Pakistan has relied heavily on LPG imported from Iran by land, and the closure of that crossing has raised concern ahead of winter, when domestic gas demand rises, The Express Tribune reported. At the meeting, Malik thanked Saudi authorities at Yanbu port for prioritising crude shipments to Pakistan, and discussed coordination with Saudi Aramco to raise crude procurement and arrange dedicated Saudi LPG shipments.

He also pitched investment. Pakistan has approved a tax-neutral bonded policy under which Saudi companies could set up commercial oil reserves in Pakistan without local tax liability. A large petroleum storage and refining complex able to take very large crude carriers is planned at Hub, Balochistan, with guidance from Technip Energies UK. The government is also seeking investment from Kuwait in oil storage, and Saudi investment in the Reko Diq copper and gold project, where Saudi Arabia has previously expressed interest in a 15% stake. Malik invited Saudi Vice Minister of Mining Khalid Al-Mudaifer to the Pakistan Minerals Investment Forum in Islamabad on 12 and 13 November. The ambassador announced same-day visa processing for Pakistani citizens at the Saudi embassy in Islamabad.

Why it matters

Imports already supply about 65% of Pakistan’s LPG, according to industry figures reported by Profit. With the Iran route shut, the gap between the official and street price shows how tight supply already is. OGRA set November’s official price at Rs294 a kg, up from about Rs279 in October, but 24 News and Pakistan Observer reported LPG selling at about Rs520 to Rs570 a kg in major cities. Reliable Saudi LPG shipments would not lower OGRA’s price, but they could narrow that gap by putting more gas on the market.

Knock-On has tracked the squeeze: the LPG shortage doubled cylinder prices in a year, and the LPG price in Pakistan could rise further under a new PSO-based formula. Piped gas is under pressure too, with a winter gas shortage looming as Qatar halts LNG.

The knock-on effects

First order: Saudi LPG shipments could ease winter supply

If dedicated cargoes are agreed, more LPG reaching Karachi and Port Qasim would help homes without piped gas, roadside eateries, bakeries and small workshops, which buy by the cylinder. Until volumes and dates are confirmed, this is a request, not a supply deal.

Second order: shipping and port costs

Replacing an overland route with sea cargoes shifts the cost to freight, insurance and port handling, at a time of higher regional shipping risk. Importers and distributors may pass some of those costs on, which keeps market prices above the official level.

Third order: storage, refining and Gulf investment

If Saudi or Kuwaiti companies take up the bonded storage offer, Pakistan would hold larger fuel buffers on its own soil, which could soften the next supply shock. Combined with the Hub complex and Reko Diq, it would deepen Gulf investment ties. These are proposals; none has a signed commitment yet.

Who could benefit

• LPG users in areas without piped gas, if extra supply narrows the market premium.
• Port, storage and terminal operators that would handle more sea-borne LPG and crude.
• Construction and engineering firms, if the Hub storage and refining complex moves ahead.

Who may face pressure

• Households and small food businesses paying well above the official price while supply stays short.
• Overland LPG traders whose Iran-route business has dried up.
• Gas-short industries that use LPG as a backup fuel.

What to watch

• Any announcement of volumes, prices or dates for Saudi LPG cargoes.
• 12–13 November: the Pakistan Minerals Investment Forum in Islamabad, and any Saudi commitment on Reko Diq.
• Whether Saudi or Kuwaiti companies apply under the bonded oil storage policy.
• Weekly SPI data, for whether LPG keeps pushing up household costs.

Sources

• The Express Tribune, Pakistan seeks Saudi energy crisis support, 31 Oct 2026
• 24 News, Ogra hikes LPG price by Rs14.73 per kg for November, 31 Oct 2026
• Pakistan Observer, Pakistan increases LPG prices for November 2026, 31 Oct 2026
• Profit, Govt plans new LPG pricing formula from November 1, industry warns of up to 25% hike, 28 Oct 2026

This is analysis, not investment advice. Figures are as of 1 Nov 2026. Knock-On is not affiliated with any political party.