Govt shifts to daily POL pricing amid global headwinds
The federal government on Friday announced that petroleum product prices would now be reviewed and notified on a daily basis, replacing the weekly pricing mechanism, as renewed tensions between the United States and Iran continue to drive volatility in global oil markets and raise concerns over fuel supplies.
Under the new pricing mechanism, the government increased the ex-depot price of High-Speed Diesel (HSD) by Rs31.05 per litre, from Rs323.30 to Rs354.35, while the price of petrol was raised by Rs5.44 per litre, from Rs310.71 to Rs316.15, with the revised rates taking effect from July 18, 2026.
Officials said the daily review system would allow domestic fuel prices to reflect changes in international oil markets more quickly while reducing the risk of supply disruptions and speculative hoarding.
The decision comes after the government had already shifted from fortnightly to weekly fuel price revisions following the first phase of the US-Iran conflict.
With tensions escalating again after a fresh exchange of strikes and growing concerns over disruptions to oil supplies through the Strait of Hormuz, authorities have opted for daily price adjustments to ensure uninterrupted fuel availability and greater transparency in the pricing mechanism.
At a news conference alongside Information Minister Ataullah Tarar, Petroleum Minister Ali Pervaiz Malik said the decision had been taken at a federal cabinet meeting chaired by Prime Minister Shehbaz Sharif.
Malik said the move was aimed at enhancing transparency in petroleum pricing without exposing the state to financial risks.
"The federal cabinet and the prime minister decided that, without exposing the state to any risk, the responsibility would be assigned to Ogra to determine petroleum prices daily in line with international market trends. Ogra will not only publish on its website the Platts benchmark rates, which are used globally to determine petroleum prices, but will also disclose the components that make up the final price consumers pay at petrol pumps. Ogra has been directed to publish all these details so that people know why these prices are unavoidable," he said.
Malik said it was unfortunate that despite Pakistan's leadership making "tremendous efforts" to steer the region towards reconciliation and a lasting ceasefire, tensions had once again begun escalating.
"It is unfortunate that despite the sincere efforts made by our leadership, especially Prime Minister Shehbaz Sharif, the Chief of Defence Forces and Chief of Army Staff Field Marshal Asim Munir, to move the region towards reconciliation and a permanent ceasefire, tensions are once again rising," he said.
The minister said petroleum prices, which had already witnessed sharp fluctuations during previous bouts of regional tensions, were once again rising.
He said diesel prices had increased significantly over the past few days, adding that the Platts benchmark for diesel had risen from $110 per barrel to $140 per barrel as of Friday.
Referring to petrol prices, Malik said the Platts benchmark had increased from around $89 per barrel to nearly $100 per barrel, pushing energy prices higher in international markets.
The minister thanked the public for their patience despite the hardships, saying people had shared the burden alongside the government despite a Rs130 billion subsidy and a targeted subsidy programme being implemented in coordination with the provincial governments.
"Today's decision is aimed at bringing greater transparency to the entire system so that people themselves can understand why increases in petroleum prices become unavoidable," he said.
Malik added that if the government had adopted the same approach taken by a previous administration in 2022, the public would have continued paying the price for years through higher inflation.
He acknowledged that the latest decision would be difficult for consumers but said it was necessary to strengthen the state.
Rejecting the perception that the government had increased the burden on consumers through higher levies or had failed to pass on the benefit of lower international oil prices, Malik said:
"The government remains committed to its promise. Just as the price of diesel has fallen from Rs520 per litre to below Rs300 per litre, people have also witnessed a substantial reduction of Rs70 to Rs80 in petrol prices."
He added that the decline in international oil prices had been fully passed on to consumers.
Clarifying the issue of the petroleum levy, Malik said Pakistan was required under international agreements to maintain such levies to support the budget.
He said the combined petroleum levy and carbon support levy on petrol remained lower than before the conflict began and that no additional burden had been imposed on the public beyond Pakistan's international commitments.
The minister said daily petroleum prices would be determined on the basis of the average Platts benchmark over the previous seven working days.
"It will be ensured that whenever prices go up, they increase accordingly, and whenever they come down, they automatically decline without requiring approval from the prime minister, Ata sahab, or me, and the relief will be passed on to the public immediately on a daily basis," he said, describing the move as another step towards deregulation.
Malik also said the prime minister had directed the Federal Investigation Agency (FIA), the Intelligence Bureau (IB) and all law enforcement agencies to take strict action against anyone involved in profiteering in the oil sector.
Addressing the press conference, Information Minister Ataullah Tarar said the new pricing mechanism would ensure that changes in international oil prices were reflected immediately in domestic fuel prices.
"With petroleum prices being determined daily, the criticism that changes in international prices are not transferred immediately will no longer hold. Whatever increase or decrease takes place will be passed on without delay," he said, adding that the move would bring greater transparency to the pricing system.
Tarar also dismissed the perception that the government had substantially increased the petroleum levy.
"There is a misconception that the levy has increased substantially, but the levy is still lower than it was before the war. Since there has been no increase in the levy now, the entire mechanism for determining oil prices will become more transparent," he said.
Highlighting the need to shift towards cleaner transportation, Tarar said Pakistan would eventually have to adopt electric vehicles.
"If our import bill continues to rise and the public continues to bear the impact of fluctuations in international oil prices, the best solution is for us to gradually move towards electric vehicles and electric motorcycles," he said.
Petrol, diesel prices revised
Under the new daily pricing mechanism, the Ministry of Energy (Petroleum Division) revised ex-depot petroleum prices for July 18, 2026, increasing petrol and diesel prices by up to Rs31 per litre in line with international market trends.
The price of High-Speed Diesel (HSD) was increased by Rs31.05 per litre, from Rs323.30 to Rs354.35 per litre.
Meanwhile, the price of petrol was increased by Rs5.44 per litre, from Rs310.71 to Rs316.15 per litre.
The government is currently charging a petroleum levy of Rs70.82 per litre on retail sales of HSD and Rs79.46 per litre on direct sales, along with a Rs5 carbon support levy (CSL).
On petrol, it is charging Rs80 per litre as petroleum levy and Rs5 per litre as CSL at retail outlets.
The government is also charging a petroleum levy of Rs105 per litre on HOBC (97 RON) and MS (95 RON), while the levy on Superior Kerosene Oil and Light Diesel Oil stands at Rs20.36 and Rs15.84 per litre, respectively, with no carbon support levy.
For furnace oil, the petroleum levy stands at Rs77 per litre (Rs82,077 per metric tonne) for both retail and direct sales, in addition to a Rs5 per litre (Rs5,330 per metric tonne) carbon support levy.
The Petroleum Division said the revised prices would remain effective for July 18, 2026 only.
Officials said the shift to daily pricing would also discourage petroleum dealers allegedly involved in hoarding fuel products in anticipation of price increases.
Last week, under the weekly review mechanism, the government had increased petrol and diesel prices by up to Rs13.80 per litre.
Officials said international oil prices had surged again following the renewed conflict between Iran and the United States and concerns over the closure of the Strait of Hormuz, threatening global oil supplies, including those to Pakistan.
Domestic fuel prices had initially declined following the Iran-US peace deal but started rising again after fresh hostilities resumed.
The renewed conflict has also raised concerns over potential fuel shortages in the country.
High-speed diesel is widely used in the transport and agriculture sectors, while petrol is primarily consumed by motorcycles and cars. Officials said petrol demand has increased following restrictions on the use of indigenous gas in Punjab.
Kerosene oil continues to be used in remote areas, particularly in the country's northern regions where LPG is not readily available for cooking, while the Pakistan Army remains one of its principal users. Light diesel oil is primarily used by industry.
Petrol pump owners reject policy
Meanwhile, the All Pakistan Petrol Pump Owners Association rejected the government's petroleum price deregulation policy, warning that it would consider launching protests and a nationwide strike next week if the decision was not withdrawn.
In a video statement, the association's chairman, Nauman Ali Butt, urged the government to review the policy, saying petrol pump owners should not bear the burden of the new system.
He demanded that all stakeholders be taken into confidence before oil marketing companies (OMCs) finalised fuel prices under the proposed mechanism.
Butt said nearly 15,000 petrol pump owners across the country had expressed serious reservations over the policy.
He warned that the new mechanism would affect oil tankers, transportation and the overall fuel pricing system.
The association's chairman also called on the government to consult petrol pump owners instead of making unilateral decisions.