Pakistan's fuel prices are determined daily using a seven-day rolling average of international petrol and diesel prices, the Oil and Gas Regulatory Authority (OGRA) informed the Senate Standing Committee on Petroleum on Thursday.
Acting OGRA Chairman Masroor Khan said the mechanism ensures that fluctuations in international oil markets are gradually reflected in domestic fuel prices over seven days, reducing the risk of profiteering and market manipulation.
"If international oil prices fall today, the reduction will be reflected in Pakistan over the next seven days. Likewise, any increase will also be passed on gradually," he told the committee.
Petroleum Minister Ali Pervaiz Malik said the federal government had delegated the authority to determine petroleum product prices to OGRA under a transparent pricing mechanism available on the regulator's website.
He added that Prime Minister Shehbaz Sharif had directed OGRA to publish the pricing formula in Urdu to improve public understanding of how fuel prices are calculated.
The minister also told lawmakers that the International Monetary Fund (IMF) was unlikely to approve a reduction in the petroleum levy. However, he said the lender could consider such a proposal if the government identified an alternative source of revenue to offset the loss.
Malik said Pakistan's current petroleum levy remains lower than the level imposed during the recent regional conflict.
During the meeting, Senator Saifullah Abro criticised the daily pricing system, calling it "slow poison" for consumers.
"The public does not know what the fuel price will be tomorrow. They can neither live nor die under this uncertainty," he said.
Abro also questioned why petrol prices rose by nearly Rs30 per litre despite fluctuations in global crude oil prices between July 11 and July 17.
Responding to the criticism, Malik said domestic fuel prices are linked to international prices of refined petroleum products rather than crude oil alone and also include applicable taxes, duties and other pricing components.
Masroor Khan added that customs duty on petrol currently stands at Rs18.11 per litre, saying the new pricing mechanism has eliminated speculative gains previously enjoyed by traders ahead of scheduled price revisions.
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