Islamabad – The Pakistani government has decided to deregulate petroleum product prices, allowing oil marketing companies (OMCs) to set competitive rates. This move is designed to enhance market efficiency, promote fair pricing, and attract investment in the energy sector. However, a price cap will be established to ensure stability and protect consumers from excessive price fluctuations.

Ethanol Blending to Reduce Fuel Costs

As part of this initiative, the government is also planning to permit oil refineries to blend up to 5% ethanol into petroleum products. This step aims to lower fuel costs, reduce dependence on imported crude oil, and promote sustainable energy solutions.

Boosting Energy Production Through Offshore Exploration

Speaking at the annual Oil and Gas Conference, Petroleum Minister Musadik Malik highlighted the inefficiencies in Pakistan’s offshore oil and gas exploration sector. He revealed that only 18 offshore wells have been drilled in the past 60 years, whereas neighboring countries have successfully discovered offshore reserves.

To address this shortfall, Pakistan has announced the auction of 40 offshore and 31 onshore blocks for oil and gas exploration—the first such auction in a decade. This initiative is expected to increase domestic energy production, reduce reliance on imports, and improve energy security.

Strategic Impact of Deregulation

The deregulation of fuel prices is aimed at:

  • Encouraging competition among OMCs
  • Enhancing investment in the petroleum sector
  • Stabilizing fuel prices with a regulated cap
  • Promoting alternative energy sources through ethanol blending
  • Increasing offshore and onshore exploration efforts

This decision marks a significant step in reforming Pakistan’s energy sector, fostering economic growth, and ensuring a stable fuel supply for consumers.