Govt Creates Fuel Price Stabilisation Fund to Cushion Consumers

The federal government has established a Petroleum Prices Stabilisation Fund to manage sharp swings in fuel prices, introducing a new financial mechanism at a time when petroleum costs remain a major concern for households, transporters and businesses across Pakistan. The development was announced in Islamabad after the Ministry of Finance issued a formal notification creating a separate account structure for the fund.

According to the notification, the fund has been set up following approval by the federal cabinet on June 5. The government has created a dedicated head of account so that money collected under the mechanism can be formally recorded, managed and transferred through the public finance system.

All proceeds received for the Petroleum Prices Stabilisation Fund will be credited to the Public Account of the Federation under the major head of Special Deposit Fund. A separate account head and object code have also been assigned, allowing authorities to track the fund’s receipts and financial movement through official channels.

The notification states that the Finance Division, Petroleum Division and the Oil and Gas Regulatory Authority will jointly prepare the fund’s operating framework. These rules will define how the mechanism will function, how money will be managed, and what approvals will be required before the system becomes fully operational.

The Finance Division has circulated copies of the notification to key financial and administrative institutions, including the Auditor General of Pakistan, Controller General of Accounts, Accountant General Pakistan Revenues and the accountants general of all four provinces. The State Bank of Pakistan, Presidency, Prime Minister’s Office, Cabinet Division, Ministry of Law and Justice and provincial governments have also been informed.

Provincial governments have been directed to complete the necessary administrative arrangements linked to collection and management under the new mechanism. This means implementation will require coordination between federal finance managers, regulators, provincial authorities and accounting offices before the fund can function smoothly.

The move comes as Pakistan continues to face repeated fuel price shocks caused by changes in the international oil market, currency pressures, taxes, levies and import costs. Fuel prices directly influence transport fares, food supply chains, industrial costs and inflation expectations, making petroleum price management a politically and economically sensitive issue.

For consumers, the fund is being presented as a cushion against extreme volatility rather than a guarantee of permanently low fuel prices. Its effectiveness will depend on how the government funds it, how transparently it is operated, and whether the mechanism is used to absorb temporary shocks without creating new fiscal pressure.

The next stage will be the approval of detailed rules by the relevant divisions and regulators. Businesses, transport operators and consumers will closely watch whether the new fund helps moderate sudden price changes and brings more predictability to Pakistan’s fuel pricing system in the coming months.