Pakistan petroleum prices are calculated using a seven-day average, Federal Minister for
Petroleum Ali Pervaiz Malik told the National Assembly. He said the government follows a
transparent formula to determine fuel prices according to changes in the international oil market.
The minister explained the pricing system while responding to a calling attention notice about
changes in petroleum prices. The notice raised questions about daily price calculations instead
of the previous system of reviewing prices every two weeks. Ali Pervaiz Malik clarified that the
Oil and Gas Regulatory Authority (OGRA) uses the average price over seven days to determine
local fuel rates.

He also said OGRA had published the pricing formula on its official website. According to the
minister, Pakistan has changed its fuel pricing system several times over the years. Prices were
once reviewed annually and later monthly. The government subsequently introduced a
fortnightly system before adopting the current seven-day average method.

Ali Pervaiz Malik said Pakistan imports all its oil requirements and therefore depends heavily on
international markets. He explained that changes in global oil prices can affect local fuel rates.
The government must also ensure that petroleum products remain available and prevent illegal
profiteering and stockpiling.

The minister added that keeping local fuel prices close to international rates helps reflect global
market changes. He said the existing system also supports fuel availability at petrol pumps and
reduces supply problems for consumers.

He explained that international oil price trends usually become clearer after three or four days.
This helps authorities understand whether prices are rising or falling before making pricing
decisions.

The minister further informed the House that refineries had reduced their gross refining margins
again following a request from the prime minister. He said a cap of $38 had been placed on the
crack margin.

According to Ali Pervaiz Malik, this measure helped reduce high-speed diesel prices by Rs7.69
per litre the previous day. He added that petrol prices had also fallen considerably. These steps
aim to improve fuel supplies and respond to international market changes.

Source: Original news report

Razia khan