Pakistan Implements Daily Petroleum Pricing to Combat Market Volatility

The Government of Pakistan has implemented a new daily pricing system for petrol and diesel to align domestic costs with international market volatility. Under this mechanism, the Oil and Gas Regulatory Authority (OGRA) determines and publishes fuel prices every night based on a seven-day average of international prices, with changes taking effect at midnight. This shift removes the Petroleum Division, Finance Division, and the prime minister from the final price determination process.

Petroleum Minister Ali Pervaiz Malik announced the transition following a review by the Petroleum Price Reform Committee. The move was driven by rising global crude prices—with Brent crude reaching $84 per barrel—and escalating tensions regarding the Strait of Hormuz. To mitigate extreme volatility for consumers, the government may utilize a stabilization fund to buffer price spikes.

The transition faced opposition from the All Pakistan Petrol Pump Owners Association, which condemned the daily revisions as operationally and financially unacceptable. In tandem with the pricing shift, the government revised petroleum export duties on July 16, increasing duties on diesel and aviation turbine fuel while reducing the duty on petrol. Officials have warned that strict action will be taken against fuel hoarding and profiteering during the rollout.