ISLAMABAD: Prime Minister Shehbaz Sharif has rejected a proposed oil pricing formula, stepping in to prevent what industry leaders warned could trigger a severe fuel crisis across Pakistan. The decision followed strong resistance from oil companies and growing uncertainty in global energy markets.

The controversial proposal, backed by former petroleum minister Musadik Malik, suggested shifting to an inventory cost based pricing model. However, the plan faced immediate pushback from stakeholders who argued it lacked clarity and posed serious risks to supply chain stability and financial viability.

During a high level meeting, the prime minister directed Musadik Malik, now serving in the climate change portfolio, to refrain from intervening in petroleum affairs. Officials present said the premier expressed confidence in current Petroleum Minister Ali Pervaiz Malik, crediting him with maintaining fuel supplies despite regional disruptions.

Pakistan’s energy security remains under pressure following tensions around the Strait of Hormuz, a critical global oil route impacted by recent geopolitical conflict. Officials noted that prudent management helped the country avoid shortages even as international supply lines tightened.

Industry representatives, including the Oil Companies Advisory Council, warned that the proposed formula based on a four week Platts average could disrupt procurement cycles, strain cash flows and create imbalances in fuel availability. Concerns were also raised about delayed payments and unclear pricing mechanisms.

Experts and executives, including leadership at Pakistan State Oil, cautioned that abrupt policy shifts could undermine investor confidence and destabilise the supply chain. With global prices volatile, the government has been urged to retain the existing pricing mechanism to ensure continuity, stability and uninterrupted fuel supply nationwide.