Government says daily fuel pricing will curb abuse and improve transparency

ISLAMABAD: Petroleum Minister Ali Pervaiz Malik said on Saturday that the shift to daily fuel price adjustments is intended to check market abuse, prevent windfall gains and provide consumers with more transparent and fair pricing.

The minister made the remarks during a meeting with major stakeholders from the petroleum sector, where the new pricing system and its implementation were discussed. According to a news release, the participants included representatives of the Oil and Gas Regulatory Authority (Ogra), the Oil Companies Advisory Council (OCAC), the Oil Marketing Association of Pakistan (OMAP), refineries, oil marketing companies and senior officials of the Petroleum Division.

Malik had announced a day earlier that fuel prices would now be revised daily because of fluctuations in international markets following renewed hostilities between Iran and the United States. Under the new system, retail petroleum prices will be set through a transparent, formula-based mechanism linked to market fundamentals, with the stated aim of reducing room for political intervention and protecting consumers from sudden price distortions.

The meeting was convened to brief the industry on the move from weekly to daily petroleum price revisions and to gather feedback on implementation issues for a smoother transition. The petroleum industry broadly welcomed the decision and described it as a positive move towards deregulation of the sector.

Government says reform is part of phased deregulation

Malik told the meeting that the reform was introduced on the directive of Prime Minister Shehbaz Sharif and approved by the federal cabinet as part of the government’s effort to establish a rules-based petroleum pricing system. He said the daily pricing regime marked a significant move towards a competitive, market-led economy by ending dependence on the weekly pricing cycle and mandatory government approval.

Officials informed participants that the new mechanism is a central element of the government’s phased deregulation strategy, which seeks to gradually reduce state intervention and let market forces determine petroleum prices, in a manner similar to the daily movement in exchange rates.

The minister said the Petroleum Division, in consultation with Ogra and industry stakeholders, was finalising standard operating procedures for the transition. He added that technical matters, including the Inland Freight Equalisation Margin (IFEM), refinery adjustments and true-up mechanisms, were being addressed in coordination with stakeholders.

Ogra informed the meeting that it had aligned its internal systems for implementation of the new regime and was improving its data dissemination arrangements to publish daily petroleum price information in the interest of greater public transparency.

Operational concerns discussed at stakeholder meeting

The meeting also reviewed operational matters related to supply chain logistics, inventory management and the availability of real-time data. The government assured participants of full support in resolving operational issues and said a dedicated committee had been formed to supervise the transition and settle implementation matters through consensus.

Malik said Ogra, district administrations, OMCs, dealers, OCAC and OMAP all had a role to play in ensuring the reform succeeds. He acknowledged that major reforms often bring implementation challenges, but said the government remained committed to protecting consumers’ interests while also ensuring the long-term sustainability of the petroleum sector.

Representatives of OCAC, OMAP, refineries and oil marketing companies presented their views and raised operational concerns about the new system. The minister assured them that genuine issues would be addressed through continued consultation and collaborative engagement. He also directed the Petroleum Division and Ogra to hold follow-up meetings with industry representatives to refine the pricing formula further, resolve remaining technical matters and support the rollout of the system.

Pakistan had been revising fuel prices on a weekly basis since early March, alongside fuel conservation measures introduced amid possible oil supply disruptions linked to the conflict in the Middle East. In April, the federal government also announced targeted relief measures to provide subsidised fuel.

A day earlier, the government raised petrol and high-speed diesel prices by Rs5.44 and Rs31.05 per litre, respectively, with immediate effect for the next three days until July 20, in order to pass on the impact of higher import premiums and rising global prices after renewed regional tensions. Following the increase, petrol is priced at Rs316.15 per litre and HSD at Rs354.35 per litre.