ISLAMABAD: The government has decided to keep petrol and diesel prices unchanged despite rising international oil prices, but will pay about Rs23 billion to oil marketing companies (OMCs) in price differential payments to absorb the increase.
According to official documents, Prime Minister Muhammad Shehbaz Sharif approved the decision following a summary submitted by the Petroleum Ministry regarding fuel pricing effective from March 14, 2026.
Under the decision, prices of Motor Spirit (petrol) and High-Speed Diesel (HSD) will remain unchanged, while the government will compensate oil marketing companies (OMCs) with a price differential of Rs75.05 per litre on diesel and Rs49.63 per litre on petrol.
It is also learnt from the documents that the government has estimated price differential claims amounting to around Rs23 billion for the one-week period from March 14 to March 20, 2026, which will be paid through the Oil and Gas Regulatory Authority (OGRA).
“The estimated Price Differential Claims (PDC) of OMCs for the period from 14th March, 2026 to 20th March, 2026 i-e Rs23 billion would be paid by OGRA,” the official documents stated.
To finance this relief measure, the Finance Division has already secured cabinet approval for the creation of the Prime Minister’s Austerity Fund and obtained clearance from the Economic Coordination Committee (ECC) for transferring Rs27.1 billion to the fund. Out of this amount, Rs23 billion will be transferred to OGRA to settle the price differential payments to OMCs.
Industry sources said that OGRA will develop a formal mechanism for payment of these claims, which will include verification and auditing of invoices submitted by OMCs before disbursement. The Petroleum Division’s DG Oil has also asked OGRA to take appropriate action for implementation of this decision, they added.
The government’s move comes amid volatile global oil markets, driven by rising geopolitical tensions and increasing pressure on importing countries like Pakistan. By absorbing the additional cost through subsidies, officials aim to prevent a sudden spike in fuel prices that could trigger broader inflation across the economy.
For consumers already struggling with rising costs, keeping fuel prices unchanged offers short-term relief. Stable petrol and diesel rates could help moderate inflation, particularly in transportation and goods pricing, giving low- and middle-income households some breathing room. However, industry sources warned that maintaining prices through subsidies may place additional pressure on public finances if international oil prices continue to rise in the coming weeks.
