Petroleum Minister Ali Pervaiz Malik says the pricing mechanism aims to reflect international oil market trends, prevent hoarding and ensure uninterrupted fuel supplies.
ISLAMABAD: Federal Minister for Petroleum Ali Pervaiz Malik on Tuesday said petroleum prices in Pakistan were determined using a seven-day average under a transparent formula established by the Oil and Gas Regulatory Authority (OGRA).
Responding to a calling attention notice in the National Assembly regarding the daily determination of petroleum prices instead of the previous fortnightly mechanism, the minister said OGRA had published the pricing formula on its website.
He explained that Pakistan had previously revised petroleum prices annually and subsequently moved to monthly and fortnightly adjustments. The current mechanism was designed to respond more effectively to fluctuations in international oil markets.
Ali Pervaiz Malik said Pakistan imported all its oil requirements, making the country vulnerable to volatility in global prices. The government therefore needed to maintain uninterrupted supplies while preventing profiteering and hoarding.
He said aligning domestic petroleum prices with international market rates helped reflect global price movements locally and strengthened supply-chain security.
According to the minister, international oil price trends generally became clearer after three to four days, indicating whether prices were moving upwards or downwards. The seven-day average mechanism helped improve fuel availability at petrol pumps and reduce difficulties for consumers, he added.
The minister said the government had introduced the mechanism to address supply-related challenges and ensure the availability of petroleum products across the country.
He also informed the House that, at the prime minister’s request, refineries had again reduced their gross refining margins. A cap of $38 had been imposed on the crack margin, he added.
The measures resulted in a reduction of Rs7.69 per litre in the price of high-speed diesel on Monday, while petrol prices also recorded a considerable decrease.
The government maintains that the pricing framework is intended to balance international market movements, domestic fuel availability and consumer interests.