Pakistan is reviewing its petroleum pricing system as escalating geopolitical tensions around the Strait of Hormuz continue to drive global oil prices higher, prompting the government to consider introducing a daily fuel price adjustment mechanism.
The proposal was discussed during a high-level meeting of the Petroleum Price Reform Committee, chaired by Federal Minister for Petroleum Ali Pervaiz Malik, as officials examined ways to make Pakistan’s fuel pricing system more responsive to rapidly changing international oil markets.
Global oil prices climb on Middle East tensions
Renewed tensions between the United States and Iran have raised concerns over potential disruptions to oil shipments through the Strait of Hormuz, one of the world’s busiest energy corridors.
The uncertainty has pushed international crude oil prices sharply higher.
According to officials, US crude oil has risen to around $82 per barrel, while Brent crude has climbed to approximately $84 per barrel.
Just days earlier, benchmark prices were trading near $68 and $71 per barrel, respectively.
The rapid increase has heightened concerns that oil-importing countries, including Pakistan, could face higher fuel import costs if market volatility persists.
Pakistan may move to daily petrol prices
During the committee meeting, officials discussed several options to reform Pakistan’s petroleum pricing mechanism.
One of the key proposals under consideration is replacing the current periodic fuel price revisions with a daily pricing system, allowing domestic prices to reflect international market movements more quickly.
The committee will submit its recommendations to Prime Minister Shehbaz Sharif, who will make the final decision on whether to implement the proposed changes.
Greater transparency through OGRA
The committee also recommended that the Oil and Gas Regulatory Authority (OGRA) publish petroleum price data on its website every day to improve transparency and public access to pricing information.
Officials further agreed that the Petroleum Price Stabilization Fund should operate under a rules-based framework to provide greater consistency and predictability in fuel price management.
The meeting also endorsed plans to digitalize Pakistan’s oil supply chain to improve efficiency, transparency, and oversight across the petroleum sector.
Minister highlights growing uncertainty
Petroleum Minister Ali Pervaiz Malik said renewed instability surrounding the Strait of Hormuz has increased the urgency of reviewing Pakistan’s fuel pricing mechanism.
He noted that the committee is evaluating various pricing models that can better respond to rapidly changing international market conditions.
Malik also said petrol prices in Pakistan remain lower than those in Bangladesh, Sri Lanka, and Turkey, while remaining broadly comparable to prices in India.
Government proposes refinery reforms
The petroleum minister said amendments to Pakistan’s refinery policy have also been proposed to reduce dependence on imported diesel.
Strengthening domestic refining capacity, he said, is a key component of broader energy sector reforms aimed at improving the country’s resilience against global supply disruptions.
Experts urge caution
Economic analyst Syed Wasif Naqvi said that while global market volatility has intensified, implementing daily fuel price revisions may not be practical immediately.
He noted that the government is expected to continue considering multiple factors—including international crude oil prices, the rupee-dollar exchange rate, petroleum levies, and domestic taxation—before making pricing decisions, rather than reacting solely to daily market fluctuations.
Final recommendations expected soon
The Petroleum Price Reform Committee is expected to finalize its recommendations after reviewing different pricing models.
The government’s decision will determine whether Pakistan adopts a daily petroleum pricing mechanism designed to respond more effectively to fluctuations in global oil markets while improving transparency and long-term stability in the country’s energy sector.
