- Minister holds meeting with petroleum sector stakeholders.
- New regime introduced on PM’s directive: Ali Pervaiz Malik.
- Says regime represents shift towards competitive economy.
Petroleum Minister Ali Pervaiz Malik on Saturday asserted that the new fuel pricing mechanism would help curb market abuse and eliminate opportunities for windfall gains.
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 raised petrol price from Rs310.71 to Rs316.15 per litre, and diesel from Rs323.30 to Rs354.35 per litre for a three-day period, ending on July 20.
During today’s meeting with key petroleum sector stakeholders on the newly announced mechanism, he said that the reform would promote transparency, strengthen competition and ensure fair, market-based prices for consumers, according to a statement.
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 (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 petroleum 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 deregulating Pakistan’s petroleum sector.
The petroleum 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 establishing a rules-based petroleum pricing regime.
Under the new mechanism, retail petroleum prices will be determined through a transparent, formula-based system driven by market fundamentals, reducing the scope for political intervention and shielding consumers from abrupt price distortions.
Malik said that the daily pricing regime represented a fundamental shift towards a competitive, market-driven economy by ending dependence 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 gains while ensuring greater transparency and fair pricing for consumers.
Mechanism ‘part of phased deregulation’ strategy
Officials told the meeting that the daily pricing mechanism formed a key component of the government’s phased deregulation strategy aimed at gradually reducing state intervention and allowing market forces to determine petroleum prices, similar to the daily movement of exchange rates.
The petroleum minister said that the Petroleum Division, in consultation with Ogra and industry stakeholders, was finalising comprehensive standard operating procedures (SOPs) to facilitate the transition.
He added that technical matters, including the Inland Freight Equalisation Margin (IFEM), refinery adjustments and true-up 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 upgrading its data dissemination mechanisms to publish daily petroleum price information for greater public transparency.
The meeting also reviewed operational issues relating to supply chain logistics, inventory management and the availability of real-time data.
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 consumers’ interests while ensuring the long-term sustainability of the petroleum sector.
Representatives of 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 the successful rollout of the daily petroleum pricing regime.
