Fuel Prices: Government assures industry of stable pricing formula amid refinery concerns

Pakistan’s Fuel Prices framework will continue under the existing weekly mechanism for now, with the government assuring oil marketing companies and refineries that future price adjustments will be based on actual import premiums rather than temporary calculations.

The assurance was given during a meeting in Islamabad attended by Petroleum Minister Ali Pervaiz Malik, Petroleum Secretary Hamed Yaqoob Shaikh, and senior representatives from oil marketing companies and refineries.

Officials said upcoming petrol prices will be calculated using an import premium of $15.85 per barrel based on the latest cargo procured by Pakistan State Oil. Diesel prices will continue to rely on the import premium applied by Kuwait Petroleum through PSO, estimated at between $5 and $6 per barrel.

Industry representatives strongly criticised repeated changes to the pricing formula over the past three months, arguing that the revisions had caused significant financial losses, reduced profitability and created uncertainty for investors.

Several executives warned that local refineries were facing growing pressure from the circulation of smuggled high-speed diesel in the market. They urged the government to move towards full price deregulation and intensify efforts to curb fuel smuggling.

Participants also expressed concern about delayed price differential claims owed by Oil and Gas Regulatory Authority, saying the outstanding payments were creating working capital challenges for companies operating in the sector.

Ali Pervaiz Malik said the government had no immediate plans to alter the weekly pricing mechanism. He added that a committee established by the prime minister was reviewing petroleum pricing policies with input from all stakeholders and that any shift towards full deregulation would take place gradually.

The meeting also featured debate over industry representation in policy discussions, regulatory engagement and transparency in decision-making. Despite differences, government officials and industry leaders agreed to continue consultations aimed at developing a more predictable and transparent fuel pricing system.

The discussions come as Pakistan seeks to balance consumer price stability, energy sector sustainability and investor confidence in a challenging economic environment.