Pakistan to revamp fuel pricing system

July 8, 2026 (MLN): Pakistan is preparing to overhaul the way its petroleum market operates by gradually moving away from government-controlled fuel pricing, with plans to introduce greater market transparency through digitalization of the fuel supply chain and the possible publication of daily international benchmark prices.

Petroleum Minister Ali Pervaiz Malik shared the government's roadmap while briefing the National Assembly Standing Committee on Petroleum on Tuesday, saying the country was working toward deregulating the petroleum sector to create a more market-driven pricing mechanism.

He said the government intends to reduce its direct role in setting fuel prices while continuing to monitor the supply chain to ensure uninterrupted availability of petroleum products across the country.

As part of the reform agenda,  Pervaiz Malik said authorities were digitalizing the petroleum supply chain to improve oversight, efficiency and transparency.

He added that the government was also considering displaying daily Platts benchmark prices, a move aimed at giving consumers and market participants greater visibility into international fuel pricing trends that influence domestic petroleum prices.

The minister noted that Pakistan's fuel market remains highly exposed to global price movements due to its reliance on imports.

The country imports around 70% of its petrol requirements and nearly 33% of its diesel consumption, making domestic fuel prices vulnerable to fluctuations in international crude and refined product markets.

Recalling the recent regional conflict,  Pervaiz Malik said Pakistan had successfully maintained fuel supplies despite severe disruptions in international markets and limited domestic storage capacity.

He said before the conflict, crude oil was trading at around $71 per barrel, while diesel prices stood near $78 per barrel.

However, the crisis triggered sharp increases in freight charges, insurance costs and premiums, pushing gasoline prices to between $180 and $190 per tonne, while diesel supplies became scarce in international markets.

Although international crude oil prices have since fallen below pre-conflict levels, petrol and diesel prices remain elevated because of higher import-related costs, he said.

 Pervaiz Malik added that the government had ensured uninterrupted fuel supplies throughout the crisis, allowing fertilizer plants and power stations to continue operating without disruption.

At the same time, only limited restrictions were imposed on domestic gas consumption during meal hours.

On fiscal measures, the minister said the petroleum levy on petrol had exceeded PKR 80 per litre under commitments agreed with the International Monetary Fund (IMF).

Addressing concerns over the energy sector's financial health,  Pervaiz Malik said the government remained engaged with the IMF on the issue of circular debt and was confident there would be no increase in the energy sector's circular debt by the end of the current fiscal year.

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