ISLAMABAD:The federal government is considering a major shift in the petroleum pricing mechanism as the Petroleum Division has prepared a summary proposing weekly revision of petrol and diesel prices instead of the current fortnightly system amid volatility in Gulf region and global oil markets.
Official sources on condition of anonymity informed that a summary has been finalized by the Petroleum Division and will be presented in an upcoming meeting of the Economic Coordination Committee (ECC) for approval and approval for the introduction of a weekly petroleum price review mechanism in the country is likely. The proposal seeks to replace the existing 15-day pricing mechanism with a seven-day review system so domestic fuel prices can adjust more quickly to movements in international petroleum markets, said sources.
Official sources also said that the proposed measure aims to discourage speculative practices and prevent the hoarding of petroleum products (POL) by dealers attempting to gain undue advantage during periods of price adjustment. The policy also seeks to protect the oil industry from substantial inventory losses that may occur due to sharp fluctuations in fuel prices.
Sources said the move is also being considered in view of the uncertain geopolitical environment in the Gulf region, which has increased volatility in global energy markets and raised concerns about potential fluctuations in oil prices. A weekly pricing mechanism would allow the government to respond more swiftly to market developments, the said sources.
Currently, the government revises petrol and diesel prices twice a month based on international oil prices, exchange rate movements, and applicable taxes and margins, with price calculations carried out by the Oil and Gas Regulatory Authority (OGRA). However, authorities believe the fortnightly system often results in larger price adjustments after two weeks of accumulated global market changes.
Under the proposed weekly mechanism, fuel prices would be reviewed every seven days, which the sources said could reduce the magnitude of sudden price increases for consumers. Instead of facing the financial impact of price adjustments covering a full 15-day period, consumers would bear the impact of changes for only seven days at a time, potentially easing the burden caused by sharp international price swings.
It is also learnt from the sources that the proposal is aimed at improving price responsiveness and protecting consumers from large, abrupt adjustments that sometimes occur under the current fortnightly system.
Pakistan relies heavily on imported petroleum products, making domestic prices sensitive to global crude oil trends, exchange rate volatility, and geopolitical developments affecting international supply routes.
Sources said the summary prepared by the Petroleum Division has strong prospects of receiving approval at the ECC, which oversees key economic policy decisions of the federal government. If approved, the move would represent a significant change in Pakistan’s petroleum pricing policy and could bring the country’s pricing framework closer to international practices where fuel prices are adjusted more frequently in line with market dynamics.
It is pertinent to mention here that Pakistan remains heavily dependent on petroleum imports from the Gulf region to meet its domestic fuel needs. Annually, the country imports around 18–19 million tonnes of petroleum products and roughly 137,000 barrels per day of crude oil to supplement local refinery output, which is unable to satisfy total demand. The United Arab Emirates is the largest supplier of refined products—especially petrol—with ADNOC and related refineries exporting an estimated 1.5 million tonnes of petrol annually to Pakistan, primarily through Fujairah and Jebel Ali ports. Saudi Arabia, accounting for about one-third of Pakistan’s crude imports, supplies crude oil from terminals such as Ras Tanura and, more recently, discussions have included shipments via Port Yanbu on the Red Sea as an alternative route amid regional tensions. Kuwait is a major source of high-speed diesel, with long-term contracts bringing in around 2.5–3 million tonnes of diesel per year from the Mina Al Ahmadi refinery. Most of these Gulf imports transit through the strategic Strait of Hormuz, a critical chokepoint for global energy shipments, before arriving at Pakistan’s primary receiving ports—Port Qasim and Karachi Port—from where they are distributed to local refineries and oil marketing companies. This concentration of supply sources explains why volatility in the Gulf’s security environment and disruptions to maritime routes can quickly amplify domestic market concerns over fuel availability and pricing.
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