Islamabad: Federal Minister for Petroleum Ali Pervaiz Malik on Friday said the government had decided to introduce a daily petroleum pricing mechanism under which the Oil and Gas Regulatory Authority (OGRA) will determine and publish fuel prices every day in line with international market trends to enhance transparency.
Addressing a press conference alongside Federal Minister for Information and Broadcasting Attaullah Tarar, Malik said, “The Cabinet and the prime minister have decided that OGRA will be given the responsibility of determining fuel prices daily based on international market trends.”
“OGRA has been directed to publish not only the international benchmark prices but also every component that contributes to the final price consumers pay at petrol stations, enabling the public to understand why these price adjustments are necessary clearly,” he said.
Malik said the decision to shift daily fuel price determination to the Oil and Gas Regulatory Authority (OGRA) would remove the government from routine pricing decisions and place responsibility with the independent regulator, whose role is to balance the interests of consumers, the government and the oil industry.
He said the new daily pricing mechanism would be based on the seven-day average of Platts international benchmark prices, ensuring that increases and decreases in global oil prices were reflected automatically in domestic prices.
“When prices rise internationally, they will be adjusted accordingly, and when they fall, the relief will be passed on immediately. There will be no need to ask anyone, as the adjustment will be made automatically on a daily basis,” he said.
Malik described the move as another step towards deregulation, arguing that sectors in which the government’s role had been reduced had generally delivered better outcomes for consumers.
The petroleum minister said the regional situation, which the country’s leadership had worked hard to stabilise through a ceasefire and efforts towards a permanent cessation of hostilities, had once again deteriorated despite those efforts.
“I must say with regret that the situation in the region, which our leadership had tried to improve through an effective approach-first by securing a ceasefire and then by working towards permanent peace-appears to be worsening once again,” he said.
Malik credited Prime Minister Shehbaz Sharif and Field Marshal Syed Asim Munir for making “immense efforts” to restore peace but noted that renewed tensions had once again driven up international oil prices.
He said diesel prices in the international market had witnessed a significant increase over the past few days. “If I give an example, the Platts benchmark for diesel has risen from around $110 per barrel to nearly $140 per barrel. Similarly, the Platts benchmark for petrol, which was around $89 per barrel, has climbed to nearly $100 per barrel,” he said.
The petroleum minister said the increase in benchmark prices had resulted in higher energy costs across international markets. Referring to the government’s response, Malik thanked the public for showing patience during the difficult period.
“I am grateful to the people of Pakistan who have endured these hardships with great patience alongside the government. Undoubtedly, every household has been affected,” he said.
He said Prime Minister Shehbaz Sharif had utilised approximately Rs130 billion in federal government resources to provide relief to the public. With the support of President Asif Ali Zardari and all provincial chief ministers, the government had also continued a targeted subsidy programme that had expanded from the initial Rs130 billion to several hundred billion rupees.
“Despite these measures, we recognise that people are still facing hardship,” he added.
Ali Pervaiz Malik said the government remained committed to passing on the full benefit of any decline in international oil prices to consumers.
He said Prime Minister Shehbaz Sharif had fulfilled his commitment to transfer the benefit of falling global oil prices to the public.
The minister noted that diesel prices had fallen from around Rs520 per litre to the Rs300 range, while petrol prices had also declined by Rs70 to Rs80 per litre when international oil prices dropped.
“Whenever prices declined in the international market, the benefit was transferred to consumers,” he said.
He said the petroleum levy and carbon support levy on petrol and diesel remained lower than the levels that existed on February 27 and 28, before the recent conflict, adding that no extra charges beyond agreed commitments had been passed on to the public.
The petroleum minister also said the government was working on long-term reforms to Pakistan’s energy pricing and energy security framework.
He said Prime Minister Shehbaz Sharif had constituted a high-level committee under his chairmanship to develop a comprehensive deregulation strategy for the energy sector. The committee had already held four meetings and was expected to finalise its recommendations within the next 15 to 20 days.
“We will present recommendations on the future architecture of energy pricing and energy security that will determine how future generations judge this government’s performance,” he said.
Malik said that Pakistan still met around 90 per cent of its energy requirements through imports despite having existed for more than seven decades, making energy security a national priority.
He said Prime Minister Shehbaz Sharif and Field Marshal Syed Asim Munir had tasked him with preparing a comprehensive energy security framework.
As part of that effort, the government had commissioned an internationally renowned consultancy to study the feasibility of establishing strategic petroleum reserves, including whether the state could gradually allocate financial resources over the next five years to build reserves for future energy security.
He added that the government was also examining commercial bonded storage schemes and engaging with major international oil traders, as well as friendly countries including Saudi Arabia and Kuwait, to strengthen Pakistan’s long-term energy supply and storage arrangements.
Malik said the government was accelerating wide-ranging energy sector reforms aimed at strengthening Pakistan’s long-term energy security, increasing domestic oil and gas production, modernising refineries and ensuring greater market efficiency.
The minister said the government had commissioned an internationally renowned consultancy to conduct a feasibility study on establishing strategic petroleum reserves (SPRs).
Malik said the government was also working on commercial bonded storage schemes in consultation with leading global energy companies and friendly countries.
He said discussions were underway with major international oil traders, as well as Saudi Arabia, Kuwait Petroleum, QatarEnergy, American companies and Chinese companies, to encourage them to store petroleum products in Pakistan.
“The objective is to create a system under which these companies maintain petroleum stocks in Pakistan for regional markets, while the government retains the right to purchase those stocks in the event of an emergency or war,” he said.
The minister said consultations on the proposal had been completed and a summary would be presented to the federal cabinet next week.
Malik said the government was simultaneously focusing on increasing domestic oil and gas exploration and production (EandP).
He noted that Turkish Petroleum would resume offshore exploration in Pakistan after a gap of 20 years, following Prime Minister Shehbaz Sharif’s recent visit to Trkiye.
“Turkish Petroleum will bring its exploration vessel to Pakistan in October for offshore oil and gas exploration, and the Turkish energy minister is also expected to visit Pakistan,” he said.
The petroleum minister added that the government was working with the International Monetary Fund (IMF) to resolve outstanding circular debt issues so that exploration and production companies could receive payments and accelerate investment and drilling activities.
He also said the Refinery Upgrade Policy had been submitted to the Cabinet Committee on Energy and was expected to be approved soon.
“The policy will enable refineries to process different grades of crude oil and supply petroleum products to consumers at internationally competitive prices,” he said.
Malik said the government was also undertaking reforms in the gas sector, including the unbundling of gas utilities, consolidation of oil marketing companies (OMCs), and improvements to Pakistan’s energy infrastructure and administrative framework.
“These reforms are intended to build a stronger, more efficient and secure energy sector for Pakistan in the years ahead,” he said.
The minister expressed confidence that the government’s reforms would strengthen Pakistan’s energy sector in the long run.
“If the public has to bear some temporary hardship, we will work together to overcome it through the right strategy and other policy measures. History will remember the work carried out by Prime Minister Shehbaz Sharif and Field Marshal Syed Asim Munir in positive terms,” he said.
Malik also warned against profiteering in the oil sector, saying the prime minister had directed all relevant law enforcement agencies to take strict action against anyone attempting to exploit consumers.
“Prime Minister Shehbaz Sharif has directed the FIA, Intelligence Bureau (IB) and all other law enforcement agencies to ensure that if any illegal profiteering takes place anywhere in the oil sector, the strictest possible action will be taken. You will see the law being enforced from today,” he said.
The minister added that the government would make every possible effort to safeguard consumers’ interests and protect the public from unjustified price manipulation.
