The Government of Pakistan has introduced a new pricing system for high-speed diesel (HSD) to manage rising fuel costs caused by global tensions and supply disruptions.
The decision was approved by the federal cabinet after a proposal from the Petroleum Division.
Under the new system, diesel prices will be linked to the average price of Dubai crude oil from the previous week.
Additional premiums, including those set by Saudi suppliers, will also be included to reflect real import costs. This step aims to create a more structured and transparent pricing method.
To control sudden price changes, the government has introduced limits on profit margins, known as crack spreads, by setting a maximum and minimum range. This is expected to reduce extreme fluctuations in diesel prices.
The policy also considers higher shipping and insurance costs due to risks in the Strait of Hormuz. Extra freight charges will be allowed, especially for imports coming from outside the Gulf region.
In a major move, only Pakistan State Oil will be allowed to import diesel. Other oil marketing companies will need special approval from authorities.
This step is aimed at better control over fuel imports and reducing pressure on foreign reserves.
The government has ensured that Pakistan State Oil will recover its import costs through fuel prices, supported by a financial adjustment system.
Officials also confirmed that the new mechanism will remain in place for three months but may be reviewed earlier if global conditions improve.
Other fuels like petrol and kerosene will continue under the existing pricing system, while authorities closely monitor international market trends.