By The government of Pakistan is reportedly considering bringing back the “Corona-era formula” for determining petrol and diesel prices as concerns grow over possible disruptions in global oil supply due to rising tensions in the Middle East.
According to media reports, officials are reviewing a proposal to fix petrol and diesel prices on a weekly basis, replacing the current monthly or bi-weekly adjustment mechanism. The move is aimed at ensuring stability in the petroleum market and preventing artificial shortages caused by speculation or hoarding.
Why the Government Is Reviewing the Pricing Mechanism?
The main objective behind the proposed policy change is to discourage fuel dealers from stockpiling petroleum products whenever news of a potential price increase circulates. Such hoarding often leads to temporary shortages at petrol pumps, causing inconvenience for consumers and disrupting the supply chain.
By implementing a weekly price adjustment system, the government hopes to respond quickly to global oil price fluctuations and maintain a consistent supply of fuel across the country.
Officials believe that frequent price revisions will reduce incentives for dealers to hoard fuel because price changes would be smaller and more predictable compared to large periodic adjustments.
Possible Increase in Fuel Prices
Reports suggest that if tensions in the Middle East continue to escalate, global crude oil prices could surge significantly. In such a scenario, Pakistan may see a substantial rise in petroleum product prices.
Estimates indicate that petrol prices could increase by up to PKR 20 per litre, while diesel prices may rise by as much as PKR 45 per litre in the coming days. Diesel price increases are particularly significant as the fuel is widely used in transport, agriculture, and industrial sectors.
Impact of Middle East Tensions on Oil Supply
The proposal comes amid ongoing geopolitical tensions involving the United States, Israel, and Iran. Conflicts in the region have historically disrupted crude oil shipments, affecting global supply chains and pushing prices upward.
Since Pakistan relies heavily on imported petroleum products, any disturbance in international oil routes can quickly impact domestic fuel availability and pricing.
Lessons from the Covid-19 Era
During the Covid-19 pandemic, Pakistan introduced a weekly petroleum price adjustment mechanism to maintain supply and reduce the risk of artificial shortages. The system allowed the government to react quickly to global market changes and helped ensure that petrol pumps remained operational during a period of economic uncertainty.
Authorities are now considering reviving the same strategy to manage potential supply risks stemming from the current geopolitical situation.
Ensuring Stable Fuel Supply
Officials say the priority is to maintain uninterrupted availability of petroleum products across the country. A weekly pricing system would allow the government to pass on international price changes more rapidly while reducing speculation in the domestic market.
If implemented, the policy could significantly reshape Pakistan’s fuel pricing structure and help authorities manage supply challenges in an uncertain global energy environment.
Disclaimer:
This article is based on media reports and publicly available information. Fuel price adjustments are subject to official government notifications and may change depending on global oil market conditions and policy decisions.
