Key Takeaways
- Petroleum Minister Ali Pervaiz Malik discusses engagement with the IMF.
- Proposals include a dynamic grid and price stabilisation fund.
- Government aims to cushion oil price shocks while maintaining market-based pricing.
Petroleum Minister Ali Pervaiz Malik has stated that Pakistan is seeking greater flexibility from the International Monetary Fund (IMF) in its fuel pricing mechanism, according to an interview with Aaj News.
Malik highlighted the need for a dynamic grid and a price stabilisation fund as potential solutions to buffer the impact of oil price increases. He noted that discussions are ongoing between Pakistan’s finance team and the IMF regarding these proposals.
The minister explained that while the government has historically reviewed petroleum product prices fortnightly, it introduced daily reviews in July 2026 amid rising fuel costs. This move aims to align domestic pricing more closely with international market movements.
Malik defended the government’s adherence to market-based fuel pricing, stating that preventing price transmission could have led to bankruptcy during previous crises. He cited the 2022 situation as an example of potential consequences.
In response to criticism over high refinery margins, Malik argued that these profits are being used to fund the Brownfield Refinery Upgrade Policy, which aims to modernise domestic refining capacity and make the sector sustainable.
The minister emphasized the need for targeted relief rather than blanket subsidies for vulnerable consumers. He stated that providing such relief would be less costly to the government and exchequer compared to broader measures.
Malik also mentioned that the petroleum development levy (PDL) was temporarily eased during a Middle East conflict but has since returned to its original level, as prices stabilised.
The IMF mission is expected to visit Pakistan in August-September, where Malik will request discussions on implementing these proposed changes.
Do we have the flexibility to buffer the price increase impact? I don’t think we do. But our finance team is engaged with the IMF.
Ali Pervaiz Malik, Petroleum Minister
Today it has reached close to its original level.
Ali Pervaiz Malik, Petroleum Minister
