- Minister holds a meeting with stakeholders in the oil sector.
- New regime introduced on Prime Minister’s directive: Ali Pervaiz Malik.
- Says the regime represents a shift towards competitive economics.
Oil Minister Ali Pervaiz Malik claimed on Saturday 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 the price of petrol from Rs 310.71 to Rs 316.15 per litre, 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 stakeholders in the oil sector on the newly announced mechanism, he said the reform would promote transparency, strengthen competition and ensure fair, market-based prices for 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 Petroleum Division attended the meeting.
The meeting was convened to brief industry stakeholders on the shift from weekly to daily oil price adjustments and get 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 oil sector.
The Petroleum Minister informed the meeting that the reform had been introduced on Prime Minister Shehbaz Sharif’s directive 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 through a transparent, formula-based system driven by market fundamentals, reducing opportunities for political intervention and protecting consumers from sudden price distortions.
Malik said the daily price 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 will help curb market abuse and eliminate opportunities for windfall gains, while ensuring greater transparency and fair prices for consumers.
Mechanism “part of a gradual deregulation” strategy
Officials told the meeting that the daily price mechanism formed a key component of the government’s phased deregulation strategy, which aimed to gradually reduce state intervention and allow market forces to determine oil prices, corresponding 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 IFEM (Inland Freight Equalization Margin), refinery adjustments and correction mechanisms were addressed through close coordination with stakeholders.
Ogra informed the meeting that it had adapted its internal systems to implement the new regime and upgraded its data dissemination mechanisms to publish daily oil prices for greater public transparency.
The meeting also reviewed operational issues regarding supply chain logistics, inventory management and the availability of real-time data.
Government assured the stakeholders of its full support to address operational challenges and informed them that a dedicated committee had been set up to oversee the transition and resolve implementation issues through consensus.
The oil minister reiterated the government’s commitment to protect the interests of consumers and at the same time ensure the long-term sustainability of the oil sector.
Representatives of OCAC, OMAP, refiners 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 scheme.
