- The minister holds a meeting with stakeholders from the oil sector.
- New regime introduced on the directive of the Prime Minister: Ali Pervaiz Malik.
- According to him, the regime represents a transition towards a competitive economy.
Oil Minister Ali Pervaiz Malik said on Saturday that the new fuel pricing mechanism would help reduce market abuse and eliminate windfall opportunities.
His comments follow the government’s announcement of a daily review of fuel prices 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 diesel from Rs 323.30 to Rs 354.35 per liter for a three-day period ending July 20.
During today’s meeting with key oil sector stakeholders on the recently announced mechanism, he said the reform would promote transparency, strengthen competition and guarantee fair and market-based prices to consumers, according to a statement.
Representatives of Oil and Gas Regulatory Authority (Ogra), Oil Companies Advisory Council (OCAC), Oil Marketing Association of Pakistan (OMAP), refineries, Oil Marketing Companies (OMCs) and senior officials of the Petroleum Division attended the meeting.
The meeting was convened to brief industry stakeholders on the shift from weekly to daily adjustments in oil prices and to seek feedback on implementation challenges to ensure a smooth transition, it adds.
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 was 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, thereby reducing opportunities for political intervention and protecting consumers from abrupt price distortions.
Malik said the daily pricing regime represented a fundamental shift towards a competitive and market-driven economy by ending reliance on the weekly price announcement cycle and mandatory government approval.
He said the new system would help reduce market abuse and eliminate windfall opportunities while ensuring greater transparency and fair prices for consumers.
The mechanism “is part of the progressive deregulation strategy”
Officials told the meeting that the daily pricing mechanism was a key part of the government’s gradual deregulation strategy to gradually reduce state intervention and allow 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 Inland Freight Equalization Margin (IFEM), refinery adjustments and alignment 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 in the process of improving 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 to address operational challenges and informed them that a dedicated committee had been constituted to oversee the transition and resolve implementation issues by consensus.
The Petroleum Minister reiterated the government’s commitment to protecting the interests of consumers while ensuring the long-term sustainability of the petroleum sector.
Representatives from OCAC, OMAP, refineries and OMCs 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 rollout of the daily oil pricing regime.
