Pakistan Considers Daily and Weekly Oil Price Reviews Amid Global Uncertainty
ISLAMABAD: Following the fresh closure of the Strait of Hormuz, the Pakistani government is considering revising oil prices on a weekly or even daily basis to manage market volatility, protect consumers and prevent fuel shortages.
The proposal was discussed during the fourth meeting of the Prime Minister’s committee reviewing Pakistan’s petroleum pricing mechanism, chaired by Federal Minister for Petroleum Ali Pervaiz Malik.
Petroleum Pricing Committee Reviews Market Risks
The committee examined options for introducing more frequent oil price reviews in response to heightened volatility in international energy markets.
Sources indicated that proposals relating to the oil price review mechanism and the Petroleum Price Stabilization Fund will be finalized during the committee’s next meeting before being submitted to Prime Minister Shehbaz Sharif.
KPMG presented a study highlighting the advantages and challenges of daily or twice-weekly petroleum price revisions, warning that the continued closure of the Strait of Hormuz could trigger significant price fluctuations.
The study also noted that petrol prices in Pakistan remain lower than those in Bangladesh, Sri Lanka and Türkiye, while remaining broadly comparable with neighboring India. Recent domestic fuel prices increased by nearly Rs14 per litre following the latest geopolitical developments.
Petroleum Stabilization Fund to Operate Under Rule-Based Framework
The committee agreed that the Petroleum Price Stabilization Fund should operate under a transparent, rule-based framework governing both the collection and utilization of financial resources.
Members emphasized that clearly defined procedures would help ensure the fund functions independently of discretionary or political decisions while providing an effective mechanism to stabilize fuel prices during periods of exceptional market volatility.
Petroleum Minister Ali Pervaiz Malik stressed the importance of protecting consumers without relying on ad-hoc policy decisions. The meeting also reviewed international best practices and current developments affecting global energy markets.
Refinery Reforms and Transparency Measures Proposed
The committee also discussed amendments to Pakistan’s Refinery Policy aimed at increasing domestic diesel production and reducing reliance on imported petroleum products.
As part of efforts to improve transparency, the Oil and Gas Regulatory Authority (OGRA) will publish daily Platts benchmark pricing data on its official website, enabling consumers and businesses to better understand how domestic petroleum prices are determined.
Committee members also emphasized the need to digitize Pakistan’s oil supply chain through improved monitoring, transportation, storage and distribution systems to enhance efficiency and strengthen regulatory oversight.
Final Recommendations to Be Submitted to Prime Minister
The next meeting of the petroleum pricing committee will serve as its final session before submitting a comprehensive set of recommendations to Prime Minister Shehbaz Sharif.
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 and senior officials from relevant government institutions.
The government’s latest review comes after international crude oil prices experienced sharp swings, briefly climbing above $100 per barrel before retreating below $80 following the Iran-US peace agreement. Analysts warn that crude prices could surge beyond $150 per barrel if disruptions in the Strait of Hormuz continue.
Pakistan’s proactive policy review aims to strengthen energy security, improve pricing transparency and shield the economy from global oil market shocks while maintaining affordability for consumers.