ISLAMABAD: The federal government has decided to introduce a weekly petroleum price review mechanism in a move aimed at protecting Pakistan’s oil supply chain from rising global volatility and soaring import costs. The decision comes amid escalating tensions in the Gulf region that have disrupted global energy routes and raised fears of a potential fuel crisis.

Officials said the proposal was approved after the Petroleum Division warned of serious supply risks due to instability in the Middle East. The international oil market has remained highly volatile following conflict in the region, which has particularly affected shipping through the Strait of Hormuz, a strategic route that carries nearly 20 percent of the world’s oil supplies.

Energy experts warn that even brief disruptions in this critical corridor can cause sharp spikes in freight rates, insurance premiums and risk charges. Such shocks tend to hit import dependent countries the hardest, especially Asian markets like Pakistan that rely heavily on Gulf based crude and refined petroleum supplies.

Government data shows that Pakistan remains significantly dependent on imported fuels. During the first eight months of the current fiscal year the country imported about 3.6 million metric tons of petrol and nearly one million metric tons of high speed diesel. These imports were required to meet domestic consumption of approximately 5.2 million metric tons of petrol and 4.8 million metric tons of diesel.

Sources said shifting to weekly price adjustments will reduce the gap between international benchmark movements and domestic retail prices. The system is also expected to discourage speculative hoarding and help oil marketing companies better manage cash flows linked to volatile import costs.

Under the new mechanism, authorities will calculate fuel prices based on a five day average of Gulf Arab Platts assessments from Monday to Friday. The Oil and Gas Regulatory Authority will submit indicative prices every Friday for government approval before announcing the final rates. Officials say the move is designed to keep Pakistan’s fuel market responsive to global price shocks while ensuring steady supplies for transportation and industry.