ISLAMABAD: The Committee on Petroleum Pricing (CPP) has set a likely target of June 2027 for deregulation of petrol and directed the Oil and Gas Regulatory Authority (OGRA) to submit written recommendations on the consolidation and performance of existing Oil Marketing Companies (OMCs).
The Committee, chaired by Federal Minister for Petroleum Ali Pervaiz Malik, held its seventh meeting on September 3 to review the petroleum pricing framework and deliberate on measures to make fuel pricing more transparent and predictable while protecting consumers from undue price volatility.
The Committee agreed on a set of recommendations to strengthen the existing pricing mechanism and decided that its final report would be submitted to the Prime Minister for consideration and approval soon.
During the meeting, the Committee reviewed recommendations for the petrol pricing formula and set a likely target of June 2027 for deregulation of petrol, ensuring a gradual transition towards competitive market-based pricing while protecting consumers from undue price volatility.
The Committee also directed OGRA to submit written recommendations on the consolidation and performance of existing OMCs, particularly in terms of adoption of best practices and latest technologies.
For diesel pricing, the Committee approved guiding principles for possible rules-based intervention in case of an emergency situation, with clearly defined price-shock triggers and possible corrective measures.
The Committee also reviewed the current Inland Freight Equalisation Margin (IFEM) mechanism and agreed to a revised methodology of IFEM calculation. OGRA assured the Committee that the IFEM audit for financial year 2026 would be completed by the end of calendar year 2026.
The Committee further reviewed the report of subcommittees on a price stabilization fund benchmarked against various successful and failed global models and directed the subgroup to further refine its proposals.
The Committee, however, observed that in view of the ultimate deregulation of the market, maintaining adequate fuel reserves would be more appropriate than establishing a stabilization fund.
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 would meet with the Chairman of the Federal Board of Revenue to assess whether the taxation regime needs to be reviewed in light of changing market conditions.