By SKM
September 3, 2026
ISLAMABAD: Pakistan has set a tentative target of June 2027 for deregulation of petrol prices, as the Petroleum Pricing Committee moved ahead with reforms aimed at introducing greater competition and transparency in the fuel supply chain.
The decision was taken at the committee’s seventh meeting, chaired by Federal Minister for Petroleum Ali Pervaiz Malik, which reviewed the country’s petroleum pricing framework and measures to make fuel prices more predictable while shielding consumers from excessive volatility.
The committee agreed on a package of recommendations to strengthen the existing pricing mechanism and decided to submit its final report to Prime Minister Shehbaz Sharif for consideration and approval shortly.
For diesel, the committee approved guiding principles for possible rules-based intervention during emergencies, including clearly defined triggers for major price shocks and potential corrective measures.
The committee also reviewed proposals for revising the petrol pricing formula as part of a gradual transition towards competitive, market-based pricing ahead of the proposed June 2027 deregulation target.
On the Inland Freight Equalisation Margin (IFEM), the committee agreed to a revised calculation methodology. The Oil and Gas Regulatory Authority (OGRA) assured the meeting that the IFEM audit for FY2026 would be completed by the end of calendar year 2026.
OGRA was also directed to submit written recommendations on the consolidation and performance of existing oil marketing companies (OMCs), particularly regarding adoption of international best practices and modern technologies.
The committee reviewed proposals for establishing a price stabilisation fund, benchmarked against successful and failed models from around the world. It directed the relevant subgroup to refine its recommendations further.
However, the committee observed that, given the eventual deregulation of the petroleum market, maintaining adequate strategic fuel reserves could be more appropriate than creating a stabilisation fund.
Separately, a subcommittee headed by Naeem Ghauri will meet with the chairman of the Federal Board of Revenue (FBR) to assess whether the existing taxation regime needs to be reviewed in view of changing market conditions.
The reforms are intended to improve transparency and predictability in petroleum pricing, promote competition and market efficiency, and protect consumers against abrupt price movements as Pakistan moves gradually towards deregulation.
The meeting was attended by National Coordinator NCMC, Zahid Mir, Mir Naeem Ghauri, and representatives of OGRA, FBR, Finance Division, KPMG and the Petroleum Division. Ends
