ISLAMABAD: Pakistan’s petroleum retailers have voiced strong reservations over the government’s evolving fuel pricing policy, warning that proposals to revise petrol prices more frequently could expose filling station owners to financial losses while ultimately passing the burden on to consumers.
The criticism comes as the government continues to explore changes to the petroleum pricing mechanism following months of volatility in global oil markets. Policymakers have floated proposals ranging from weekly to even daily adjustments in domestic fuel prices in a bid to better reflect international market movements and reduce pricing distortions.
The debate has intensified after Pakistan was unable to fully pass on the benefit of lower international crude prices that followed the easing of tensions in the Middle East.
While officials argue that fiscal constraints, including the need to maintain petroleum levy revenues and broader budgetary commitments, have limited the scope for sharp price cuts, consumer groups have repeatedly questioned why domestic prices have not returned to pre-conflict levels.
The proposed changes have also drawn opposition from oil marketing companies (OMCs) and petroleum dealers, who argue that more frequent price revisions would create operational and financial challenges.
Speaking on the issue, Pakistan Petrol Pump Owners Association Chairman Humayun Khan said the government’s petroleum policies were creating uncertainty for retailers.
“If a petrol pump purchases 20,000 litres of fuel today and prices change shortly afterwards, retailers do not earn the profits people assume,” he said.
According to Khan, after tax deductions, dealers receive a margin of around Rs7 per litre, but franchise fees of Rs1.20 per litre and banking charges ranging between Rs1 and Rs2 reduce the net earnings to roughly Rs4 per litre.
He argued that the actual profitability of petrol stations was far lower than public perception and warned that abrupt pricing adjustments could leave retailers selling existing inventory at a loss.
Khan also criticized the government’s broader pricing strategy, saying it was unclear what authorities were trying to achieve.
“The government’s policies are flawed, and every policy ultimately ends up affecting the public. In the end, the money is recovered from consumers,” he said.
Questioning the proposed mechanism, the association chairman asked how the Oil and Gas Regulatory Authority (Ogra) could regulate prices determined by international market fluctuations.
He alleged that the government was shifting responsibility to oil marketing companies and the international pricing formula instead of addressing structural issues within the fuel pricing system.
