As Pakistan has started feeling the heat of financial crunch due to the US-Iran war, the oil refineries have agreed to freeze prices of kerosene oil and jet fuels for the Pakistan Air Force and armed forces as well as Hajj flights.

The refineries have kept prices of kerosene oil and jet fuels at levels prevailing on March 1, 2026. Sources told The Express Tribune that oil refineries would bear a loss of around Rs8 billion due to the provision of fuels at discounted rates.

They said that the government had informed the refineries that armed forces needed oil at lower prices; therefore, they should set prices of kerosene oil and jet fuel where rates stood on March 1, 2026.

The refineries agreed to meet the requirements of Pakistan’s armed forces and Hajj flight operations.

“I am directed to refer to the discussion held on pricing of SKO, JP-1 and JP-8 in NCMC meetings and follow-up discussions with CEOs/MDs of refineries held on May 11, 2026 at the Petroleum Division and local refineries have agreed to supply SKO and JP-8 fuels to the armed forces/Air Force at prices prevailing on March 1, 2026. Similarly, refineries have also agreed to supply JP-1 fuel at prices prevailing on March 1, 2026 for Hajj flights only. The said arrangement is for the remaining months of the current financial year, ie, till June 30, 2026,” the Petroleum Division said in a letter to the chief executive officers (CEOs) of oil refineries.

Pakistan Army is a key user of kerosene oil, which is consumed in remote areas of the country, especially the northern part. Owing to the US-Iran war, the prices of jet fuel have jumped, resulting in a crisis across the world. Even some airlines have shut down their operations. Pakistan has also faced these oil shocks as prices of petrol and diesel have crossed the Rs400-per-litre mark, affecting the daily life of consumers and resulting in an increase in inflation.

Pakistan has been spending heavily on the import of petroleum products for decades as 80% of its oil needs are met through imports from the Middle Eastern countries like Saudi Arabia, the UAE and Kuwait.

Kuwait has recently resumed supplies of diesel to Pakistan to rescue it from the looming oil crisis due to tensions in the Gulf region. Saudi Arabia is also a key supplier of oil to Pakistan, which is providing products on deferred payments.

Prime Minister Shehbaz Sharif has recently warned that Pakistan’s oil import bill has jumped from $300 million to $800 million in just a week’s time.