Pakistan mulls daily fuel price revision mechanism

The Pakistani government is considering introducing a new pricing mechanism that would allow petroleum product prices to be revised daily instead of the current fortnightly system.

According to a senior official from the Petroleum Division, the proposed framework would authorize the Oil and Gas Regulatory Authority (OGRA) to determine the prices of key petroleum products every night independently. The revised rates would come into effect from 12:00 a.m. the following day.

Under the proposed mechanism, OGRA would be responsible for setting the prices of Motor Spirit (petrol), High-Speed Diesel (HSD), Light Diesel Oil (LDO), and Kerosene Oil (KO) based on prevailing market conditions and international oil price trends.

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The move is aimed at making fuel pricing more responsive to fluctuations in global crude oil markets and exchange rate movements. It would also significantly reduce the federal government's direct role in fixing petroleum prices, shifting the responsibility to the country's energy regulator.

Pakistan currently reviews petroleum prices every 15 days, with adjustments influenced by international oil prices, the exchange rate, taxes, and the petroleum levy. A daily pricing model is expected to align domestic fuel prices more closely with real-time market developments while improving pricing transparency.

However, the proposal is still under consideration, and no official timeline has been announced for its implementation. If approved, consumers could experience more frequent changes in fuel prices, with increases or decreases reflecting daily movements in international energy markets.