Pakistan’s shift to a daily petroleum pricing system in a major shift toward a market-driven fuel pricing regime aims to reduce government intervention, improve price transparency and curb market abuse as the country advances its phased deregulation strategy, Petroleum Minister Ali Pervaiz Malik said on Saturday.
In a meeting with regulators, refineries and oil marketing companies, Malik said the reform, approved by the federal cabinet on the direction of Prime Minister Shehbaz Sharif, was a key component of the government’s phased deregulation strategy. He said the new system would determine retail prices daily through a transparent, formula-based mechanism linked to market fundamentals, replacing the existing weekly pricing regime.
“The implementation of a daily petroleum pricing regime represents a fundamental shift toward a market-driven competitive economy,” he claimed. “By decoupling petroleum prices from the weekly announcement cycle and mandatory government approval, we are reducing the potential for market abuse, exploitation and windfall gains,” he added.
Malik claimed the new mechanism would better reflect real market conditions while shielding consumers from price distortions arising from political considerations.
The minister said the Petroleum Division, in consultation with OGRA and industry stakeholders, is finalizing standard operating procedures for the transition. Technical issues, including the Inland Freight Equalization Margin, refinery adjustments and true-up mechanisms, are also being addressed to ensure smooth implementation.
OGRA officials told the meeting that the regulator is fully prepared to implement the daily pricing regime and is upgrading its systems to enable timely publication of daily petroleum prices and improve transparency.
Participants also reviewed operational issues, including supply chain logistics, inventory management and the availability of real-time market data required for the new pricing framework.
Representatives of OCAC, OMAP, refineries and oil marketing companies presented recommendations and highlighted operational concerns regarding implementation. Malik assured participants that legitimate concerns would be addressed through continued consultation with the industry.
The minister announced that a dedicated committee has been formed to oversee the transition and resolve implementation issues through consensus. He also directed the Petroleum Division and OGRA to hold further consultations with industry stakeholders to finalize the technical framework before the daily pricing system is rolled out. He said the government remains committed to protecting consumers while ensuring the long-term sustainability and competitiveness of Pakistan’s petroleum sector.