ISLAMABAD: In response to the growing instability in the Middle East following recent Israel-US strikes on Iran, Pakistani authorities are actively exploring the possibility of revising the pricing mechanism for petroleum products on a weekly basis. This move comes as part of broader efforts to better manage the volatile fuel market amid concerns over supply disruptions caused by the closure of the strategic Strait of Hormuz.
Discussions within government circles have intensified around adopting a pricing model that mirrors the approach taken during the Covid-19 pandemic, when fuel prices were adjusted more frequently to reflect market realities and prevent sudden shocks. Officials believe that transitioning to weekly price reviews could help mitigate the risks of fuel hoarding by dealers, who might otherwise stockpile supplies in anticipation of sharp price hikes. This precautionary measure aims to stabilize the market and ensure a steady supply for consumers across the country.
Industry insiders warn that if the current geopolitical tensions continue to escalate, Pakistan could face significant increases in fuel costs. Estimates suggest petrol prices might surge by as much as Rs20 per litre, while diesel could see an even steeper rise, potentially reaching Rs45 per litre. Such increases would have widespread implications for transportation, agriculture, and overall inflation, putting additional pressure on the already fragile economy.
Earlier this week, Finance Minister Muhammad Aurangzeb addressed the Senate Committee on Finance, providing a detailed briefing on the country’s petroleum reserves and economic outlook. He assured lawmakers that Pakistan currently maintains sufficient stocks of diesel and petrol to last approximately 28 days. Aurangzeb emphasized the importance of energy conservation, urging the public and industries alike to adopt measures similar to those implemented during the pandemic to reduce consumption and preserve resources.
Highlighting the government’s proactive stance, the Finance Minister revealed that Prime Minister Shehbaz Sharif has established a special committee dedicated to the daily monitoring of petroleum product supplies and prices. This committee is tasked with making swift decisions to address any emerging challenges in the fuel sector. Aurangzeb, the country’s petroleum reserves are projected to sustain demand until the end of March, providing a critical buffer as officials navigate the uncertain regional environment.
Looking ahead, the government plans to regulate fuel distribution more tightly and implement additional energy-saving initiatives to cushion the impact of potential price shocks. Aurangzeb concluded by reaffirming the administration’s commitment to managing the situation prudently, stating that if tensions in the Middle East persist, further steps will be taken to minimize adverse effects on Pakistan’s economy and its citizens.
