The government is evaluating a significant reduction in domestic fuel prices, potentially exceeding Rs55 per litre for petrol and diesel, following a decline in international oil prices and easing Middle East tensions. Working papers from the Petroleum Division, Pakistan State Oil (PSO), and the Oil and Gas Regulatory Authority (Ogra) are under review.
Prime Minister's Directive
Sources indicate that Prime Minister Shehbaz Sharif instructed Petroleum Minister Ali Pervaiz Malik to explore ways to offset the fuel price increase announced on March 7. The prime minister was reportedly dissatisfied with the earlier increase and pushed for meaningful consumer relief.
Global Price Trends
The potential reduction is driven by a sharp decline in international crude prices. Arab Light crude, the benchmark for Pakistani petroleum product pricing, has fallen by about $16 per barrel in the past week to nearly $80 per barrel.
- Oil marketing companies are lobbying against a one-time cut exceeding Rs55 per litre, advocating a phased reduction instead.
- Officials maintain that the government is assessing how much of the benefit from lower international prices can be passed on directly to consumers.
Impact of US-Iran Agreement
Global oil markets continued their downward trajectory after the United States and Iran reportedly signed an interim agreement to end hostilities, reopen the Strait of Hormuz, and ease US sanctions on Iranian oil exports. This development improved expectations regarding global oil supplies.
Transparency in Pricing
Petroleum Minister Ali Pervaiz Malik announced on Thursday that the prime minister directed authorities to ensure gains from declining global oil prices are transferred to the public without delay. In a social media post, Malik stated: "International oil prices are falling, and the prime minister has directed that this benefit be passed on to the public immediately." He also revealed that a high-level committee has been constituted to devise a transparent weekly fuel pricing mechanism, so the public can understand the reasons for price changes. The exercise will be carried out in full consultation with all stakeholders.
