Govt Proposes Reforms to Petrol Pricing Mechanism

A high-level committee reviewing Pakistan’s petroleum pricing mechanism on Monday proposed reforms aimed at improving transparency in price-setting, strengthening market stability and enhancing energy security amid renewed uncertainty in global oil markets.

The fourth meeting of the committee, constituted by the prime minister, was chaired by Federal Minister for Petroleum Ali Pervaiz Malik.

Speaking at the meeting, Malik said the committee’s work had assumed greater importance in view of the renewed closure of the Strait of Hormuz, which had increased uncertainty in international energy markets.

Referring to a study by KPMG, the minister said petrol prices in Pakistan remained lower than those in Bangladesh, Sri Lanka and Turkiye, while being broadly comparable with prices in India.

He said the government had proposed amendments to the Refinery Policy to increase domestic diesel production and reduce dependence on imported diesel as part of efforts to strengthen the country’s energy security.

The committee reviewed various options for reforming the petroleum pricing mechanism and recommended, as an immediate step, that the Oil and Gas Regulatory Authority publish daily Platts pricing data on its website. The move, it said, would allow the public to access the benchmark used for determining petroleum prices in Pakistan.

The members also agreed that the recently established petroleum price stabilisation fund should operate under a fully rule-based framework, with clearly defined mechanisms for both funding and disbursements, to ensure transparency and prevent arbitrary decision-making.

The committee also emphasised the need to digitise the oil supply chain to improve efficiency and oversight.

The petroleum minister directed that the committee’s next meeting would be its final session, after which its recommendations would be submitted to the prime minister for consideration.

The meeting was attended by Federal Minister for Economic Affairs Ahad Khan Cheema, Minister of State for Finance Bilal Azhar Kayani, OGRA Chairman Nabeel Awan, representatives of KPMG, the Finance Division, Pakistan State Oil, the Ministry of Law and Justice, the Petroleum Division and other committee members.