Pakistan To Revise Petroleum Prices Daily As Government Shifts To New Fuel Pricing System

Pakistan will shift to daily revisions of petroleum prices after the federal cabinet approved a new pricing mechanism aimed at responding more quickly to volatility in international oil markets amid the ongoing conflict in West Asia.

The decision ends the weekly price review system introduced earlier this year and hands the responsibility for fixing fuel prices to the Oil and Gas Regulatory Authority (OGRA). According to PTI, the government said the move is intended to make the pricing process more transparent while ensuring domestic fuel prices reflect international market trends more closely.

Petroleum Minister Ali Pervaiz Malik, along with Information Minister Attaullah Tarar, announced the decision at a press conference on Friday.

Malik said the cabinet had decided to assign the task of fixing fuel prices to OGRA, the country's oil and gas regulator, which would determine petroleum prices on a daily basis.

OGRA would “not just publish the fuel rates on its website that are used to determine prices, but also publish the factors leading to the price that we see in each petrol pump”.

According to PTI, the government had begun fixing petroleum prices on a weekly basis after the start of the US-Iran war in late February, replacing the earlier fortnightly review mechanism. The weekly system, however, came under criticism for delays in passing on the benefit of lower fuel prices to consumers.

Malik said the daily price announcements would continue to be determined according to a seven-day weekly average in the international market.

He said the move formed part of the government's efforts to make the system more transparent so that people could understand why increasing fuel prices were inevitable.

According to PTI, Malik also said that, as another step towards deregulation, fuel prices in Pakistan would be adjusted in line with international markets without needing to consult anyone.

Highlighting measures to boost domestic energy production, Malik said that following Prime Minister Shehbaz Sharif's recent visit to Turkiye, Turkish Petroleum, Turkiye's national oil and gas company, would begin oil and gas exploration in Pakistan in October after a gap of 20 years.

Tarar said the increase in international oil prices was linked to the worsening regional situation and added that Pakistan's efforts to resolve the situation had been “appreciated by the entire world”.

Meanwhile, the All Pakistan Petrol Pump Owners’ Association rejected the proposed price deregulation policy and warned that it would consider protests and a strike next week if the policy was not withdrawn.

The association's vice chairman, Noman Ali Butt, said the government should review its policy and not place the burden of its problems on petrol pump owners.

“All stakeholders should be taken into confidence before fixing rates with oil marketing companies,” he said in a video statement.

Butt said about 15,000 petrol pump owners across the country had serious concerns about the policy. He said the new mechanism would affect oil tankers, transportation and the pricing system, and demanded that the government consult petrol pump owners before implementing the changes.

(With inputs from PTI)