The federal government’s decision to move from weekly to daily revisions in petroleum prices has been presented as a step toward market efficiency and deregulation.
On paper, the argument has merit. In a genuinely competitive market, prices should reflect international trends, supply conditions and currency movements in real time rather than being adjusted through an arbitrary government timetable.
Unfortunately, Pakistan does not have a genuinely competitive fuel market. Nor does it have a government willing to relinquish control over pricing. Daily revisions, under these circumstances, are not deregulation. They are simply another way of throwing consumers to the wolves.
If the government truly believes in market principles, it must first stop acting as the market. Islamabad continues to determine petroleum prices while simultaneously collecting an enormous share through the Petroleum Development Levy, Climate Support Levy, customs duties and other taxes. In such conditions, consumers are exposed to the volatility of global markets without receiving any of the benefits of a free market. Risks have been privatized, while control remains firmly in government hands.
The biggest winners are unlikely to be motorists or businesses struggling with rising costs. Instead, the move overwhelmingly favors oil marketing companies, which gain greater flexibility to pass on costs almost instantly while facing little pressure to reduce prices with the same enthusiasm. In a market long dogged by allegations of collusion and cartelization, expecting daily price changes to produce genuine competition is wishful thinking. Without stronger oversight and meaningful competition, consumers will simply pay more, more often.
The timing makes the situation worse. Global oil markets remain under strain following the disruptions caused by the Iran conflict, with supply concerns continuing to keep traders on edge. Inflation, after showing encouraging signs of easing, is once again beginning to creep upwards. For millions of Pakistanis already struggling with stagnant incomes and soaring household expenses, the prospect of fuel prices changing every single day turns budgeting into little more than guesswork. Transport costs, food prices and virtually every other essential expense become moving targets, leaving families unable to plan even a week ahead.
The government insists that daily revisions will bring transparency and align domestic prices with international markets. Yet transparency means little when consumers have no meaningful choice, when taxes constitute such a large portion of the final price, and when competition remains questionable. True deregulation demands more than frequent price notifications. It requires the state to reduce its own grip on the market, strengthen competition laws and curb the cozy relationships that have too often characterized Pakistan’s petroleum sector.
Until this happens, daily fuel pricing is little more than a cosmetic reform masquerading as economic liberalization. It shifts uncertainty onto ordinary Pakistanis while preserving the government’s revenue stream and protecting the interests of powerful market players. P.M. Shehbaz Sharif may continue to speak of reform, relief and economic revival, but for those watching fuel prices change by the day while their purchasing power shrinks just as quickly, those lofty promises are increasingly running on empty.