Pakistan will begin adjusting petrol and diesel prices daily to reflect swings in global oil markets, Petroleum Minister Ali Pervaiz Malik said Friday. The move comes as renewed hostilities between Iran and the United States increase uncertainty over energy prices. The Oil and Gas Regulatory Authority will now set fuel prices under the new system.
How will Pakistan's daily fuel price adjustment work?
The federal cabinet has authorized OGRA to set petrol and diesel prices each day based on international market movements, replacing the existing pricing mechanism. Prices will be calculated using a rolling seven-day average of international petroleum prices, allowing domestic rates to track global trends without political intervention.
Why is Pakistan moving to daily fuel pricing?
Speaking at a joint news conference with Information Minister Attaullah Tarar, Malik said the cabinet and the prime minister had decided that OGRA would determine fuel prices daily based on international market trends. He said heightened volatility in global oil markets, driven by the escalating conflict involving Iran and the United States, had made more frequent price revisions necessary.
Malik acknowledged that daily adjustments could increase the financial burden on consumers. He said the government wanted the public to understand how changes in global oil prices directly affect domestic fuel costs.
Will OGRA publish its fuel pricing formula?
Under the new system, OGRA will publish the pricing formula and the factors used to calculate retail fuel prices alongside each day's revised rates. The government said this step is intended to improve transparency in how petrol and diesel prices are set.
Malik said the administration remained committed to Prime Minister Shehbaz Sharif's pledge that any future decline in international oil prices would be passed on to consumers. He added that the government was also working to reduce reliance on indirect taxation.
What is Pakistan's long term energy pricing plan?
Malik said Prime Minister Shehbaz had formed a committee under his own leadership to develop a long-term energy pricing and energy security framework for the post-war period. The committee has held four meetings so far and is expected to finalise its recommendations within 15 to 20 days.
He said the framework would guide Pakistan's future energy security and fuel pricing policies once the conflict-related uncertainty subsides.
How much have fuel prices changed under market-linked pricing before?
Highlighting the benefits of market-linked pricing, Malik said diesel prices had previously dropped from about PKR 520 ($1.85) per liter to nearly PKR 300 ($1.07) per liter when international oil prices declined. Petrol prices had fallen by around PKR 70 to PKR 80 per liter during the same period.
He said the new daily mechanism would ensure that future reductions in global oil prices are passed on to consumers more quickly than under the previous system.
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