ISLAMABAD – The federal government is preparing to introduce a phased deregulation of Pakistan’s petroleum sector, with an immediate reduction in high-speed diesel (HSD) prices expected as part of the proposed reforms.
Under the plan, the authorities are considering reducing the international crack spread for high-speed diesel from the current level of around $70 per barrel to $35–40 per barrel, a move aimed at lowering diesel prices for consumers while maintaining the financial viability of local oil refineries.
The proposed reforms envision a gradual deregulation process, beginning with petrol, followed by the inclusion of other petroleum products in the new pricing mechanism.
As part of broader IFEM (Inland Freight Equalisation Margin) reforms, the government is also considering reducing the number of petroleum depot points from 22 to 11 to improve efficiency in the fuel distribution system.
According to the officials familiar with the Petroleum Pricing Committee’s meeting held on Thursday, the committee is expected to submit its recommendations on the phased deregulation of the petroleum sector to Prime Minister Shehbaz Sharif within the next two weeks.
The recommendations are intended to provide immediate relief to consumers through a significant reduction in diesel prices while gradually reducing government control over petrol pricing.
Officials said the committee is expected to finalize its proposals on petroleum product deregulation and diesel price reductions by next Thursday before forwarding them to the prime minister for approval.
