The federal government has reduced the prices of major petroleum products under the newly introduced daily fuel pricing mechanism. According to a notification issued on Monday, petrol has been reduced by Rs4.08 per litre, bringing its price down from Rs336.03 to Rs331.95 per litre. The price of high-speed diesel (HSD) has also been cut by Rs2.45 per litre, falling from Rs392.38 to Rs389.93 per litre. In addition, the Oil and Gas Regulatory Authority (OGRA) lowered the price of kerosene oil by Rs3.58 per litre, reducing it from Rs305.22 to Rs301.64 per litre. The revised prices came into effect on August 4.
How Does the New Daily Fuel Pricing System Work?
The latest adjustment has been made under the government’s newly implemented daily petroleum pricing framework, replacing the previous fortnightly—and later weekly—review system. Under the new mechanism, OGRA determines ex-depot prices based on the average international market prices recorded over the previous seven days, enabling global oil price movements to be reflected more quickly in domestic fuel prices. According to Petroleum Minister Ali Pervaiz Malik, the system aligns Pakistan’s pricing methodology with international standards and enhances transparency by allowing OGRA to publish updated fuel prices daily on its website.
Why Did the Government Shift to Daily Pricing?
The government adopted the daily pricing mechanism in response to heightened volatility in global oil markets caused by renewed tensions in the Middle East. After the conflict involving Israel, the United States, and Iran disrupted energy markets and affected shipping through the Strait of Hormuz, Pakistan initially shifted from a fortnightly to a weekly pricing system. As uncertainty in international crude oil markets persisted following the collapse of the June ceasefire between Tehran and Washington, the government decided to move to daily price revisions to ensure domestic fuel prices more accurately reflect global market fluctuations.
What Are the Key Features of the New Pricing Framework?
According to the cabinet-approved framework, OGRA is authorised to announce daily petrol and diesel prices without requiring prior approval from the prime minister or the federal government. However, prices announced on Fridays will remain unchanged on Saturdays and Sundays. The regulator will publish daily Platts reference prices as part of the pricing methodology, while the petroleum levy cannot exceed the limit approved by the federal cabinet. Any change to the levy will require approval from the Finance Division.
What Changes Have Been Made to Fuel Import Arrangements?
The government has also revised petroleum import procedures for FY2026–27. Under the new policy, Pakistan State Oil (PSO) will exclusively import high-speed diesel, while oil marketing companies (OMCs) will continue importing petrol in accordance with their respective market shares. The revised import mechanism is intended to streamline fuel supply management while maintaining stability in domestic petroleum availability.