- Minister holds meeting with actors in the oil sector.
- New regime introduced by directive of the Prime Minister: Ali Pervaiz Malik.
- He says the regime represents a shift toward a competitive economy.
Oil Minister Ali Pervaiz Malik said on Saturday that the new fuel pricing mechanism would help curb market abuse and eliminate opportunities for windfall profits.
His comments follow the government’s announcement of daily fuel price reviews amid a sharp rise in global oil prices.
Under the new mechanism, the federal government on Friday increased the price of petrol from Rs 310.71 to Rs 316.15 per liter and that of diesel from Rs 323.30 to Rs 354.35 per liter for a period of three days ending on July 20.
During today’s meeting with key oil sector stakeholders on the newly announced mechanism, he said the reform would promote transparency, strengthen competition and ensure fair and market-based prices for consumers, according to a statement.
The meeting was attended by representatives of Oil and Gas Regulatory Authority (Ogra), Oil Companies Advisory Council (OCAC), Petroleum Marketing Association of Pakistan (OMAP), refineries, Oil Marketing Companies (OMC) and senior officials of Petroleum Division.
The meeting was convened to inform industry stakeholders about the shift from weekly to daily oil price adjustments and obtain feedback on implementation challenges to ensure a smooth transition, it added.
The move was widely welcomed by the industry, which described it as a positive step towards deregulation of Pakistan’s oil sector.
The Oil Minister informed the meeting that the reform had been introduced on the directive of Prime Minister Shehbaz Sharif and approved by the federal cabinet as part of the government’s commitment to establish a rules-based oil pricing regime.
Under the new mechanism, retail oil prices will be determined by a transparent formula-based system driven by market fundamentals, reducing the scope for political intervention and protecting consumers from abrupt price distortions.
Malik said the daily pricing regime represented a fundamental shift towards a competitive market-driven economy by ending reliance on the weekly price announcement cycle and mandatory government approval.
He said the new system would help curb market abuse and eliminate opportunities for windfall profits, while ensuring greater transparency and fair prices for consumers.
Mechanism “part of the gradual deregulation strategy”
Officials told the meeting that the daily pricing mechanism formed a key component of the government’s gradual deregulation strategy aimed at gradually reducing state intervention and allowing market forces to determine oil prices, similar to the daily movement of exchange rates.
The Petroleum Minister said the Petroleum Division, in consultation with Ogra and industry stakeholders, was finalizing comprehensive standard operating procedures (SOPs) to facilitate the transition.
He added that technical issues, including the Inland Transport Equalization Margin (IFEM), refinery adjustments and adjustment mechanisms, were being addressed through close coordination with stakeholders.
Ogra informed the meeting that it had aligned its internal systems to implement the new regime and was updating its data dissemination mechanisms to publish daily information on oil prices for greater public transparency.
The meeting also reviewed operational issues related to supply chain logistics, inventory management and real-time data availability.
The government assured stakeholders of its full support in addressing operational challenges and informed them that a dedicated committee had been constituted to oversee the transition and resolve implementation issues through consensus.
The Petroleum Minister reiterated the government’s commitment to protecting the interests of consumers while ensuring the long-term sustainability of the oil sector.
Representatives from OCAC, OMAP, refiners and OMC shared their views and highlighted operational concerns regarding the implementation of the daily pricing mechanism.
Malik directed the Petroleum Division and Ogra to hold follow-up meetings with industry representatives to further refine the pricing formula, resolve outstanding technical issues and ensure successful implementation of the daily oil pricing regime.
