Petroleum pricing committee deliberates on measures to make fuel pricing more transparent, predictable

ISLAMABAD, Sep 3 (APP):The Committee on Petroleum Pricing, chaired by Federal Minister for Petroleum Ali Pervaiz Malik, met on Thursday to review the petroleum pricing framework and deliberate on measures to make fuel pricing more transparent and predictable while protecting consumers from undue price volatility.

The committee agreed on a set of recommendations to strengthen the existing pricing mechanism and decided to submit its final report to the Prime Minister for consideration and approval soon, a news release said.

For diesel pricing, the committee approved guiding principles for possible rules-based intervention in emergencies, with clearly defined price-shock triggers and possible corrective measures.

The committee also reviewed recommendations for the petrol pricing formula while setting a likely target of June 2027 for petrol deregulation. The move would ensure a gradual transition towards competitive, market-based pricing while protecting consumers from undue price volatility.

The committee reviewed the current IFEM mechanism and agreed on a revised methodology for calculating IFEM. OGRA assured that the IFEM audit for FY26 would be completed by the end of CY26.

The committee further directed OGRA to submit written recommendations on the consolidation and performance of existing OMCs, particularly regarding the adoption of best practices and latest technologies.

The committee reviewed the report of subcommittees on the price stabilisation fund, benchmarked against various successful and failed global models, and directed the subgroup to further refine its proposals.

However, the committee observed that, in view of the eventual deregulation of the market, maintaining adequate fuel reserves would be more appropriate than establishing a stabilisation fund.

The recommendations agreed by the committee aim to bring greater predictability and transparency to petroleum pricing, ensure market efficiency and safeguard consumers against abrupt price movements, while facilitating Pakistan’s gradual transition towards deregulation.

The subcommittee headed by Naeem Ghauri would meet with the Chairman FBR to assess whether the taxation regime needs to be reviewed in light of changing market conditions.

The meeting was attended by other members of the committee, including National Coordinator NCMC Zahid Mir and Mir Naeem Ghauri, along with representatives of OGRA, FBR, Finance Division, KPMG and officials of the Petroleum Division.