PAKISTAN:

The federal government on Friday announced that petroleum product prices would now be determined on a daily basis following the renewed escalation in the region after the recent exchange of strikes between the United States and Iran.

Speaking at a press conference alongside Information Minister Ataullah Tarar, Petroleum Minister Ali Pervaiz Malik said the decision was taken during a meeting of the federal cabinet chaired by the prime minister.

Malik said the move aimed to enhance transparency in the pricing mechanism without exposing the state to financial risks.

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“The federal cabinet and the prime minister decided that, without exposing the state to any risk, the responsibility would be assigned to Ogra to determine petroleum prices daily in line with international market trends. Ogra will not only publish on its website the Platts benchmark rates, which are used globally to determine petroleum prices, but will also disclose the components that make up the final price consumers pay at petrol pumps. Ogra has been directed to publish all these details so that people know why these prices are unavoidable,” he said.

Malik said it was unfortunate that despite Pakistan’s leadership making “tremendous efforts” to steer the region towards reconciliation and a lasting ceasefire, tensions had once again begun escalating.

“It is unfortunate that despite the sincere efforts made by our leadership, especially Prime Minister Shehbaz Sharif, the Chief of Defence Forces and Chief of Army Staff Field Marshal Asim Munir, to move the region towards reconciliation and a permanent ceasefire, tensions are once again rising,” he said.

The minister said petroleum prices, which had already witnessed sharp fluctuations during previous bouts of regional tensions, were once again on the rise.

He said diesel prices had increased significantly over the past few days, adding that the Platts benchmark for diesel had risen from $110 per barrel to $140 per barrel as of Friday.

Referring to petrol prices, Malik said the Platts benchmark, which had been around $89 per barrel, had climbed to nearly $100 per barrel, triggering another increase in energy prices across international markets.

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The minister thanked the public for showing patience despite the hardships, saying people had endured the burden alongside the government despite a Rs130 billion subsidy provided by the government and a targeted subsidy programme being implemented in coordination with the provincial governments.

“Today’s decision is aimed at bringing greater transparency to the entire system so that people themselves can understand why increases in petroleum prices become unavoidable,” he said.

Malik added that if the government had adopted the same approach taken by a previous administration in 2022, the public would have continued paying the price for years in the form of higher inflation.

Malik acknowledged that the latest decision would be difficult for the public but said it was necessary to strengthen the state.

He rejected the perception that the government had increased the burden on consumers through higher levies or had failed to pass on the benefit of the recent decline in international oil prices.

“The government remains committed to its promise. Just as the price of diesel has fallen from Rs520 per litre to below Rs300 per litre, people have also witnessed a substantial reduction of Rs70 to Rs80 in petrol prices,” the minister said.

He added that the decline in international oil prices had been fully passed on to consumers.

Clarifying the issue of the petroleum levy, Malik said Pakistan was required under international agreements to maintain such levies to support the budget.

He said the combined petroleum levy and carbon support levy on petrol remained lower than their level before the conflict began, adding that no additional burden had been imposed on the public beyond the country’s international commitments.

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The minister said daily petroleum prices would be determined on the basis of the average Platts benchmark over the previous seven working days.

“It will be ensured that whenever prices go up, they increase accordingly, and whenever they come down, they automatically decline without requiring approval from the prime minister, Ata sahab, or me, and the relief will be passed on to the public immediately on a daily basis,” he said, describing the move as another step towards deregulation.

Malik further said that the prime minister had directed the Federal Investigation Agency (FIA), the Intelligence Bureau (IB) and all law enforcement agencies to take strict action against anyone involved in profiteering in the oil sector.

Addressing the presser, Information Minister Tarar said the new daily pricing mechanism would ensure that changes in international oil prices were passed on to consumers immediately.

“With petroleum prices being determined daily, the criticism that changes in international prices are not transferred immediately will no longer hold. Whatever increase or decrease takes place will be passed on without delay,” he said, adding that the move would bring greater transparency to the pricing system.

Tarar also rejected the perception that the government had significantly increased the petroleum levy.

“There is a misconception that the levy has increased substantially, but the levy is still lower than it was before the war. Since there has been no increase in the levy now, the entire mechanism for determining oil prices will become more transparent,” he said.

Highlighting the need to shift towards cleaner transportation, the information minister said Pakistan would eventually have to adopt electric vehicles.

“If our import bill continues to rise and the public continues to bear the impact of fluctuations in international oil prices, the best solution is for us to gradually move towards electric vehicles and electric motorcycles,” he said.

Petrol pump owners reject fuel pricing policy

Meanwhile, the All Pakistan Petrol Pump Owners Association rejected the government’s proposed petroleum price deregulation policy, warning that it would consider launching protests and a nationwide strike next week if the decision was not withdrawn.

In a video statement, the association’s chairman, Nauman Ali Butt, urged the government to review its policy, saying the burden of the new system should not be placed on petrol pump owners.

He demanded that all stakeholders be taken into confidence before oil marketing companies (OMCs) finalised fuel prices under the proposed mechanism.

Butt said nearly 15,000 petrol pump owners across the country had expressed serious reservations over the policy.

He warned that the new mechanism would affect oil tankers, transportation, and the overall fuel pricing system.

The association’s chairman also called on the government to consult petrol pump owners instead of making unilateral decisions.