'It had nothing to fall back on': Robert Kiyosaki on how Hormuz closure impacted Pakistan's oil supplies

As Pakistan continues to grapple with rising oil costs due to the ongoing Iran conflict, Rich Dad Poor Dad author Robert Kiyosaki pointed to the country's worsening energy crisis as the Strait of Hormuz continues to remain disrupted due to the ongoing Iran war. On Thursday, Pakistan's Federal Minister for Petroleum Ali Malik said that Pakistan does not have strategic petroleum reserves even for a single day and that the country runs on commercial reserves.

While giving the update, Malik likened Pakistan's situation to that of India's and said, "Pakistan is not India that can secure oil with one signature."

According to Kiyosaki, the reason for such a difference between the two countries is preparation. When India was amping up its emergency reserves, Pakistan was busy telling the world that its fuel supply was "secure and stable", even claiming that there were long queues at petrol pumps in India. 

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As they say, numbers don't lie; the real situation came out when Pakistan hiked petrol prices by 43 per cent and diesel rates by 55 per cent. After the hike, petrol went up from PKR 321 per litre to PKR 458 per litre, whereas diesel rose from PKR 335 per litre to PKR 520 per litre. 

In India, petrol and diesel rates have remained unchanged since April 2022, through a global pandemic, the Russia-Ukraine war, and now almost two months of the West Asia conflict. Petrol retails for ₹94.77 per litre, and diesel sells for ₹87.67 per litre, respectively, in India at present. 

Furthermore, Kiyosaki wrote, "The war did not create this gap. The war just made it impossible to keep saying everything was fine."

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He added that India diversified its oil sources years ago, with Russia now being its top supplier and Venezuela resuming exports. The author mentioned that while India didn't pass on the rising costs onto consumers, Pakistan produces zero oil and is entirely reliant on imports. 

"90% of those imports flow through the Gulf region — through the same routes the Iran war has disrupted. It has no strategic storage. It has an IMF agreement that it cannot breach. It has limited foreign exchange reserves. When Hormuz partially closed, Pakistan had nothing to fall back on."

Furthermore, he said that Pakistan hiked fuel prices by 55%, whereas India absorbed the shocks caused by volatile global oil markets. 

West Asia conflict impact on Pakistan

Earlier this week, Pakistan Prime Minister Shehbaz Sharif said that the country's oil import bill almost tripled from $300 million before the war to $800 million, erasing the economic progress it had made over the last 2 years. 

Economist Kamran Batt told the Dawn newspaper, "They increase transportation costs, push up the prices of daily-use commodities and food items, raise the overall cost of living, reduce purchasing power, increase poverty and unemployment, slow economic activity, and eventually fuel public discontent as quality of life deteriorates."

Moreover, the State Bank of Pakistan raised its policy rate by a full percentage point to 11.5%. 

“The Committee noted that prolonging the Middle East conflict has intensified risks to the macroeconomic outlook. In particular, the global energy prices, freight charges and insurance premiums continue to remain significantly above pre-conflict levels. Furthermore, the supply chain disruptions have contributed to the prevailing uncertainty," the bank said.