Middle East has slipped into another round of conflict and the ripple effects are already reaching Pakistan’s fuel consumers. Pakistan will now revise petroleum prices every day instead of once a week, allowing the government to react to the volatile global oil prices driven by the ongoing tensions between US and Iran. The announcement came as Pakistan also reported a current account deficit of $139 million for FY2025-26, reversing the surplus recorded a year earlier. Petroleum Minister Ali Pervaiz Malik and Information Minister Attaullah Tarar announced the changes at a press conference on Friday. Petroleum Minister Ali Pervaiz Malik and Information Minister Attaullah Tarar announced the changes at a press conference on Friday.Malik said the Cabinet had decided to hand over the task of fixing fuel prices to the Oil and Gas Regulatory Authority (OGRA), Pakistan’s oil and gas regulator. Under the new system, OGRA will determine fuel prices on a daily basis.He said OGRA would “not just publish the fuel rates on its website that are used to determine prices, but also publish the factors leading to the price that we see in each petrol pump”.
Middle East crisis and Pak’s fuel hit
Pakistan had been revising petroleum prices every week after the start of the US-Iran war in late February. Before that, fuel prices were revised every fortnight.Pak government had faced criticism over delays in passing on the benefit of lower international oil prices to consumers.According to Malik, the move is aimed at making the pricing mechanism more transparent so that people understand why increases in fuel prices are sometimes unavoidable. He said daily price announcements would be based on the seven-day average of international market prices.He added that, as part of broader deregulation, fuel prices in the country would be aligned with international markets without the need to consult anyone.
Energy sector plans
Malik also announced plans to boost domestic energy production, saying Turkish Petroleum, Turkey’s national oil and gas company, will return to Pakistan in October to begin oil and gas exploration after a 20-year gap. The move follows Pak PM Shehbaz Sharif’s recent visit to Turkey.Information minister Tarar said the rise in international oil prices was linked to the worsening regional situation and added that Pakistan’s efforts to resolve the situation had been “appreciated by the entire world”.
Petrol pump owners reject policy
The All Pakistan Petrol Pump Owners’ Association rejected the proposed fuel price deregulation policy and warned it could launch protests and a strike next week if the decision is not withdrawn.The association’s vice chairman, Noman Ali Butt, urged the government to reconsider the policy and said petrol pump owners should not bear the burden of the government’s problems.“All stakeholders should be taken into confidence before fixing rates with oil marketing companies,” he said in a video statement.Butt said that around 15,000 petrol pump owners across Pakistan had serious concerns over the proposal. He argued that the new policy would affect oil tankers, transportation and the pricing system, and called for consultations with petrol pump owners before implementation.
Pakistan’s financial portfolio
Pakistan has continued to face economic challenges as the country recorded a current account deficit (CAD) of $139 million in FY2025-26 after posting a surplus of $1.838 billion in FY2024-25.Data released by the State Bank of Pakistan (SBP) on Friday showed the return to a deficit, which, although marginal, remains a source of concern and could worsen because of the situation in the Middle East.The SBP data showed that Pakistan recorded a current account deficit of $649 million in June, compared with a surplus of $500 million in May. Meanwhile, the Pak economy has continued to rely heavily on remittances as exports failed to grow while imports remained elevated. Pakistan recorded a trade deficit of more than $35.5 billion during FY26, putting pressure on the current account.Goods exports fell to $30.843 billion in FY26 from $32.434 billion a year earlier. Services exports, however, increased to $10.034 billion from $8.45 billion, helping overall exports register only marginal growth.Combined exports of goods and services stood at $40.877 billion in FY26, compared with $40.793 billion in the previous fiscal year, an increase of just $84 million.Imports totalled $76.4 billion during FY26. The external account was supported by remittances, which rose to $41.585 billion from $38.3 billion in FY25, an increase of about $3.3 billion.