ISLAMABAD – Federal Minister for Petroleum Ali Pervaiz Malik has said the government is unlikely to secure the International Monetary Fund’s (IMF) approval for a reduction in the petroleum levy unless an alternative source of revenue is identified.
Speaking during a meeting of the National Assembly’s Standing Committee on Petroleum, chaired by Umar Farooq, the minister said the current levy on petrol remains lower than the level imposed during the war period.
“If an alternative to the petroleum levy is found, the IMF may consider allowing a reduction,” Malik said.
Briefing the committee, the minister said the government has delegated the authority to determine petroleum product prices to the Oil and Gas Regulatory Authority (OGRA), while the regulator is responsible for consulting stakeholders before finalising prices.
He said the pricing mechanism is available on OGRA’s website, adding that Prime Minister Shehbaz Sharif had directed the authority to publish the methodology in Urdu as well to enhance transparency.
Malik explained that petrol and diesel prices are still based on a seven-day rolling average of international market rates, with government taxes and the margins of oil marketing companies incorporated into the final price.
He noted that under the previous weekly pricing mechanism, some suppliers would deliberately reduce fuel supply when they anticipated price increases based on a three-day average, creating distortions in the market.
Senator Saifullah Abro criticised the daily pricing mechanism, calling it a “slow poison” for consumers.
“People are uncertain about fuel prices every day. The public neither knows today’s price nor tomorrow’s. This daily adjustment has become a slow poison—they can neither live comfortably nor escape its impact,” he said.
Responding to questions about the appointment of OGRA’s chairman, Malik said the recruitment process had been initiated on time and interviews were conducted, but no suitable candidate was found. He added that the selection process has now been restarted.
Acting OGRA Chairman told the committee that changes in international oil prices would be reflected in Pakistan within seven days under the current pricing formula.
“If global oil prices fall this evening, consumers in Pakistan will benefit within seven days. Likewise, any increase in international prices will also be passed on after seven days,” he said.
He added that petrol and diesel prices are determined daily using the seven-day average of international market prices. The current customs duty on petrol stands at Rs18.11 per litre.
The acting chairman said the new system benefits consumers by ensuring gradual adjustments and preventing market manipulation. He argued that it has eliminated opportunities for short-term profiteering by traders who previously spread misleading information to exploit expected price changes.
During the meeting, Senator Abro questioned how the government had increased fuel prices by Rs30 per litre when international crude oil prices rose from $76 per barrel on July 11 to $82 per barrel on July 17.
In response, the petroleum minister clarified that domestic fuel prices are linked to the cost of refined petroleum products, such as petrol and diesel, rather than crude oil prices alone.
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