Govt forms committee to ensure smooth rollout of daily fuel pricing

ISLAMABAD: The government on Saturday constituted a dedicated committee comprising representatives of the Petroleum Division, the Oil and Gas Regulatory Authority (OGRA) and the petroleum industry to address implementation issues and ensure the smooth rollout of daily petroleum pricing under its broader deregulation agenda.

The decision was taken during a high-level consultative meeting chaired by Petroleum Minister Ali Pervaiz Malik and attended by senior officials of OGRA, the Oil Companies Advisory Council (OCAC), the Oil Marketing Association of Pakistan (OMAP), refineries, oil marketing companies (OMCs) and the Petroleum Division.

The meeting was convened to brief stakeholders on the transition from the existing fortnightly petroleum pricing mechanism to daily pricing and to obtain first-hand feedback on operational and technical challenges ahead of the implementation of the new regime.

The committee comprises the Additional Secretary (Policy), Petroleum Division, Member Finance OGRA, Senior Executive Director OGRA and the Secretary General of OCAC. It has been tasked with resolving implementation issues through consensus and facilitating the successful rollout of the daily petroleum pricing system.

According to the Petroleum Division, the reform has been undertaken on the directive of Prime Minister Shehbaz Sharif and approved by the federal cabinet as part of the government's commitment to establish a rules-based petroleum pricing regime and gradually deregulate Pakistan's downstream petroleum sector.

Addressing the participants, Petroleum Minister Ali Pervaiz Malik said retail petroleum prices under the new mechanism would be determined through a transparent, formula-based process anchored in market fundamentals, replacing the existing fortnightly pricing system that requires government approval. He said the objective was to insulate consumers from politically influenced pricing decisions while promoting transparency and market efficiency.

The minister said the introduction of daily petroleum pricing represented a fundamental shift towards a more market-driven and competitive economy. He added that moving away from the previous pricing cycle would reduce opportunities for market abuse and windfall gains while ensuring fuel prices better reflected prevailing market conditions.

Participants were informed that the daily pricing mechanism would enhance transparency and ensure fairer pricing for consumers by shifting the focus from political intervention to market realities. The reform, they were told, forms a key component of the government's phased deregulation strategy aimed at aligning domestic fuel prices more closely with international market trends.

Malik said the Petroleum Division, in close consultation with OGRA and industry stakeholders, was finalising comprehensive standard operating procedures (SOPs) to facilitate the transition. Technical matters, including the Inland Freight Equalization Margin (IFEM), refinery adjustments and true-up mechanisms, were being addressed collaboratively to ensure seamless implementation.

OGRA informed the meeting that it was fully prepared to implement the new pricing regime and was upgrading its internal processes and data dissemination systems. The regulator also committed to publishing daily petroleum price data to enhance transparency and improve public access.

The meeting also reviewed operational aspects of the transition, including supply chain logistics, inventory management and the availability of real-time data. The government assured industry stakeholders of its full support in addressing operational challenges during the transition.

The petroleum minister emphasised that OGRA, district administrations, OMCs, petroleum dealers, OCAC and OMAP all have important roles to play in ensuring the success of the reform. He acknowledged that every major reform presents implementation challenges but reiterated the government's commitment to protecting consumer interests while ensuring the long-term sustainability of the petroleum sector.

Representatives of OCAC, OMAP, refineries and OMCs shared their views and highlighted operational concerns regarding the implementation of the daily pricing mechanism. The minister assured participants that all genuine concerns would be addressed through continuous consultation and collaborative engagement.

He directed the Petroleum Division and OGRA to hold follow-up meetings with industry representatives to further refine the technical pricing formula, address remaining concerns and ensure the successful implementation of the daily petroleum pricing regime.

Meanwhile, the Oil Companies Advisory Council welcomed the decision to introduce daily petroleum pricing and praised the Ministry of Petroleum and OGRA for advancing deregulation, describing it as a long-awaited reform that had remained under discussion for nearly two decades.

OCAC assured the government of its full support in implementing the new regime, saying deregulation would foster a more competitive, transparent and efficient fuel market by encouraging fair competition and improving operational efficiency across the industry. It added that consumers would ultimately benefit from greater choice, improved service standards and market-driven pricing, while a well-planned deregulation framework would contribute to the sustainable growth and modernisation of Pakistan's downstream petroleum sector while safeguarding consumer interests.