Rising tensions in the Middle East and fears of a possible conflict are beginning to impact Pakistan’s economy, prompting policymakers to consider a major change in how petroleum prices are adjusted in the country.

According to economic sources, the government is reviewing a proposal to shift from the current weekly or fortnightly petroleum price revision system to a daily adjustment mechanism. The move aims to align domestic fuel prices more closely with fluctuations in the international oil market.

Under the existing system, petrol and diesel prices in Pakistan are usually revised every two weeks or sometimes weekly. However, global oil prices often change rapidly on a daily basis. Economists say the slow adjustment process in the local market can create opportunities for hoarders and profiteers to exploit price differences.

Experts believe that linking domestic fuel prices to daily changes in global markets could help prevent artificial shortages and discourage hoarding of petroleum products.

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Former State Bank governor Ishrat Hussain has warned that persistently high global oil prices could place significant pressure on Pakistan’s external accounts. According to him, expensive petroleum imports may add an additional burden of around 12 billion to 14 billion dollars on the country’s external sector.

Meanwhile, renowned economist Hafeez Pasha also expressed concern about the broader economic impact of the regional crisis. He warned that if tensions in the Middle East escalate further, remittances sent by overseas Pakistanis could also be affected.

Estimates suggest Pakistan could face a decline of around 2 billion to 4 billion dollars in annual remittances under such circumstances.