The federal government is considering replacing the current weekly petroleum price adjustment mechanism with a daily pricing system, a move that has drawn strong opposition from petrol pump owners.
Under the proposed mechanism, the Oil and Gas Regulatory Authority (OGRA) will determine the prices of petrol, high-speed diesel, light diesel oil and kerosene every night, with revised prices taking effect at midnight. The plan would significantly reduce the government’s role in fuel price determination by ending the current approval process involving the Petroleum Division, Finance Division and the prime minister.
Prime Minister Shehbaz Sharif had formed a committee to review a new petroleum pricing mechanism. The committee, chaired by Petroleum Minister Ali Pervaiz Malik, has held four meetings so far. KPMG, hired to evaluate future pricing options, presented four models — monthly, fortnightly, weekly and daily pricing. According to sources, committee members have so far favoured the daily pricing model.
The proposed system is expected to be hybrid rather than full deregulation. OGRA will continue regulating the market by monitoring petroleum stocks, ensuring storage requirements are met and preventing hoarding.
The Pakistan Petrol Pump Owners Association has rejected the proposal, calling daily price revisions “unacceptable”. In a statement, the association said that the existing weekly pricing mechanism had already hurt petrol pump businesses and warned that daily changes would make stock management and financial planning even more difficult.
The association also criticised the government for failing to consult stakeholders before considering the new pricing model. It urged authorities to reconsider the proposal, involve petrol pump owners in the decision-making process and adopt a more practical policy.
Instead of daily revisions, the association proposed returning to a monthly pricing mechanism. It also warned that it would announce its future course of action if its concerns were ignored.
Petroleum prices are currently revised on a weekly basis. Previously, they were adjusted fortnightly and, before that, on a monthly basis.
