Pakistan Weighs Daily Fuel Price Changes Under OGRA-Led Plan

The federal government is considering a major shift in Pakistan’s petroleum pricing system that could move the country from weekly fuel revisions to daily price adjustments. The proposal, reported from Islamabad, would place the Oil and Gas Regulatory Authority at the centre of price-setting for petrol, high-speed diesel, light diesel oil and kerosene.

Under the plan being discussed, OGRA would calculate fuel prices every night and the revised rates would take effect from midnight. This would mark a significant change from the present weekly mechanism and would sharply reduce the role of the Petroleum Division, Finance Division and the prime minister’s office in routine price approvals.

Officials familiar with the discussions say the proposal is meant to make pricing more responsive to international oil market movements. Instead of waiting for weekly summaries and multiple layers of approval, the system would allow domestic rates to reflect changes in global crude and refined petroleum prices more quickly, especially during periods of market volatility.

A committee formed by Prime Minister Shehbaz Sharif has been reviewing possible reforms to the petroleum pricing mechanism. Its latest meeting was held on July 13 under Petroleum Minister Ali Pervaiz Malik, with participation from officials of the Finance Division, Petroleum Division, OGRA, Pakistan State Oil, the Ministry of Law and Justice and other stakeholders.

KPMG, engaged by the Petroleum Division for technical evaluation, presented four options before the committee: monthly, fortnightly, weekly and daily pricing. According to the report, committee members have so far shown preference for the daily model, though the proposed system is expected to be a hybrid arrangement rather than a complete deregulation of the market.

A key part of the proposal would change how margins and freight-related components are handled. The government would no longer directly determine the Inland Freight Equalisation Margin, oil marketing companies’ margins or dealers’ commissions. Instead, oil marketing companies would be allowed to set these components themselves, similar to the existing approach used for high octane fuel.

OGRA’s role would not disappear under the new framework. The regulator would continue monitoring market behaviour, petroleum stocks and storage compliance by oil marketing companies. Officials say this oversight would be needed to prevent hoarding, artificial shortages and sudden supply disruptions if the pricing system becomes more market-linked.

The proposal also includes the idea of using a stabilisation fund to protect consumers from sharp shocks. If international prices fall substantially, part of the savings could be deposited into the fund. If global prices surge later, the same fund could be used to soften the impact on domestic consumers, with one example suggesting a possible price band between Rs275 and Rs325 per litre.

The debate comes at a sensitive time for Pakistan, where fuel prices directly affect inflation, transport costs, food supply chains and household budgets. Daily fuel adjustments could improve transparency and reduce administrative delays, but they may also expose consumers to more frequent price changes. The next stage will depend on the committee’s final recommendation and whether the prime minister approves the proposed shift.