Pakistan targets deregulating petrol prices by June next year

The government is targeting June 2027 to deregulate petrol prices as part of a broader reform of the petroleum pricing framework aimed at moving towards market-based pricing, the Petroleum Pricing Committee said on Thursday.

The Committee on Petroleum Pricing, chaired by Federal Minister for Petroleum Ali Pervaiz Malik, met to review the petroleum pricing framework and deliberate on measures to make fuel pricing more transparent and predictable while protecting consumers from undue price volatility, read a statement.

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The committee reviewed recommendations for the petrol pricing formula and set a likely target of June 2027 for petrol deregulation, ensuring a gradual transition to competitive, market-based pricing while protecting consumers from undue price volatility.

During the meeting, the committee agreed on recommendations to strengthen the existing pricing mechanism and decided to submit its final report to the Prime Minister soon for consideration and approval.

For diesel pricing, the committee approved the guiding principles for possible rules-based intervention in case of an emergency, with clearly defined price shock triggers and possible corrective measures.

It also reviewed the current IFEM mechanism and agreed to a revised methodology of IFEM calculation. OGRA assured IFEM audit for FY26 would be completed by the end of CY26.

The committee further directed the Oil and Gas Regulatory Authority (OGRA) to submit written recommendations on consolidation and performance of existing OMCs.

It reviewed the report of subcommittees on price stabilisation fund benchmarked against various successful and failed global models and directed the subgroup to further refine its proposals.

The committee, however, observed that in view of the ultimate deregulation of the market, maintaining adequate fuel reserves would be more appropriate than establishing a stabilisation fund.

It was learnt that the subcommittee headed by Naeem Ghauri would meet with the Chairman of the FBR to assess whether the taxation regime needs to be reviewed in light of changing market conditions.