ISLAMABAD: Pakistan has formed a committee to oversee the transition from weekly to daily oil price revisions, the petroleum ministry said on Saturday, aiming to ensure transparency and fair pricing for customers as renewed US-Iran hostilities fuel volatility in global oil markets.
The move comes as renewed US-Iran tensions have fueled concerns over global energy supplies, with disruptions around the Strait of Hormuz raising uncertainty in international oil markets.
Pakistan recently increased petrol and diesel prices by Rs5.44 ($0.02) and Rs31.05 ($0.11) per liter, bringing them to Rs316.5 ($1.14) and Rs345.35 ($1.24) per liter, respectively, for the three-day period ending July 20. The increase followed a rise in global oil prices, with Brent crude climbing above $88.1 a barrel on Friday, approaching a one-month high.
Ali Pervaiz Malik, Pakistan’s petroleum minister, chaired a high-level meeting with representatives from leading private and state-owned oil companies to brief them on the new pricing mechanism. The initiative is aimed at deregulating Pakistan’s petroleum sector, improving transparency, ensuring fair pricing for consumers and promoting a more competitive market.
“A dedicated committee has been constituted to oversee the transition process and resolve implementation issues through consensus,” the petroleum ministry said in a statement about the shift from the old to the new system.
Under the new pricing mechanism, retail fuel prices would be determined through a transparent, formula-based system that reflects prevailing market conditions, the ministry added.
“By decoupling petroleum prices from the weekly announcement cycle and mandatory government approval, we are reducing the potential for market abuse and windfall gains,” Malik was quoted as saying.
The minister added that the Petroleum Division was developing comprehensive standard operating procedures in consultation with the Oil and Gas Regulatory Authority (OGRA) and other stakeholders to support the transition.
“Technical matters, including the Inland Freight Equalization Margin (IEFM), refinery adjustments, and true-up mechanisms, are being addressed collaboratively to ensure seamless implementation,” the statement said.
It added OGRA representatives informed participants that the regulator was fully prepared to implement the new pricing regime and was upgrading its internal processes and data dissemination systems.
OGRA will also publish international benchmark prices and the key factors used to calculate retail fuel prices to improve transparency for consumers.
