Government implements new system for daily determination of petrol and diesel prices

The federal government has introduced a new system of daily price review for the next nine months, making a significant change in the pricing mechanism for petroleum products. Under this system, the prices of petrol, high-speed diesel and other petroleum products will be reviewed on a daily basis so that the impact of changes in crude oil prices in the global market can be transmitted to the local market in a relatively short time.

According to a notification issued by the Petroleum Division of the Ministry of Energy, the new prices will be determined on the basis of international crude oil prices, Platts Arab Gulf benchmark and actual import costs. Officials say that the aim of this method is to make local prices more consistent with global market trends and bring transparency in the pricing process.

According to the new system, if Pakistan State Oil imports new petroleum consignments during the last seven business days, then the same import premium and related costs will be included in the pricing formula. However, if there is no new import during this period, the average import premium since January 1 will be used as the basis to avoid unnecessary fluctuations in prices and provide relatively stable prices to consumers.

The government has clarified that the new prices of petroleum products will be announced only from Monday to Friday, while the existing prices will remain the same on Saturday and Sunday. According to officials, this method will not only simplify the administrative process but will also help maintain stability in the market.

According to the notification, there will be no need to take separate approval from the Prime Minister or the federal cabinet for determining daily prices, but prices will be set automatically according to the approved formula. This step will make the process of announcing prices faster and according to predetermined principles.

However, the petroleum development levy, customs duty, climate levy and margins of oil marketing companies will continue to be under the control of the federal government. Any change in these financial elements will require government approval.

According to economists, the daily price review system can help in transmitting changes in the global oil market to local prices more quickly. According to him, if there is a significant decrease or increase in global crude oil prices, its effects will reach Pakistani consumers relatively soon compared to before; however, its practical results will depend on the global market situation and import costs over the next few months. The government has initially implemented this system for a trial period of nine months, during which its performance and impact on the market will be evaluated and a future course of action will be decided.