Govt sets Jun '27 target for petrol deregulation

Committee also okays diesel price intervention rules for emergencies, IFEM overhaul

ISLAMABAD:

The Committee on Petroleum Pricing on Thursday recommended setting a target of June 2027 for petrol price deregulation, as it finalised recommendations for a more transparent and predictable fuel pricing framework.

The meeting, chaired by Federal Minister for Petroleum Ali Pervaiz Malik, reviewed the petroleum pricing framework and deliberated on measures to protect consumers from undue price volatility while ensuring market efficiency. For diesel pricing, the committee approved guiding principles for possible rules-based intervention in case of emergency, with clearly defined price shock triggers and corrective measures.

The committee also reviewed the current IFEM mechanism and agreed to a revised methodology for its calculation. The Oil and Gas Regulatory Authority (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 oil marketing companies (OMCs), particularly regarding adoption of best practices and latest technologies.

A report on the price stabilisation fund, benchmarked against various global models, was reviewed. The committee directed the sub-group to further refine its proposals but observed that maintaining adequate fuel reserves would be more appropriate than establishing a stabilisation fund, given the ultimate goal of market deregulation.

The recommendations agreed by the committee are aimed at bringing greater predictability and transparency in petroleum pricing, ensuring market efficiency and safeguarding consumers against abrupt price movements, while facilitating Pakistan's gradual transition towards deregulation.

A subcommittee headed by Naeem Ghauri will meet with the Chairman of the Federal Board of Revenue (FBR) to assess whether the taxation regime needs to be reviewed in light of changing market conditions. The meeting was attended by other committee members, including National Coordinator NCMC Zahid Mir, along with representatives of OGRA, FBR, the Finance Division, KPMG and officials of the Petroleum Division.