Govt eyes petrol deregulation by June next year

Dawn reported that the Petroleum Prices Stabilisation Fund is not likely to become operational, as the government instead plans further changes to fuel pricing. Petrol is to be fully deregulated by June 2027, with daily adjustments similar to high-octane grades, and high-speed diesel is planned for a later phase. The fund was notified in June but holds no deposits, although the finance ministry has already set up special heads of account for it.

A committee led by Petroleum Minister Ali Pervaiz Malik agreed in principle to let the Oil and Gas Regulatory Authority switch diesel pricing to crude-based calculations when the crack spread rises unusually, without seeking repeated cabinet approvals. The cabinet temporarily capped the crack spread at $41.89 per barrel last month, after it averaged above $60 and produced windfall gains for local refineries. Once approved, Ogra would be able to adjust the spread within a prescribed floor-and-cap mechanism.

The committee also agreed on a revised method for the Inland Freight Equalisation Margin, and Ogra assured it that the FY26 audit would be completed by the end of calendar 2026. Informed sources said daily price changes had generally helped stabilise the market, and a consultancy advised that adequate fuel stocks work better than stabilisation funds. The petroleum division said the committee's final report will go to the prime minister, with two or three more meetings still expected.