Government establishes Petroleum Prices Stabilisation Fund

ISLAMABAD: The government has established a Petroleum Prices Stabilisation Fund to help shield the domestic market from sharp fluctuations in international oil prices.

The Ministry of Finance issued a formal notification creating the fund and allocating a dedicated public account head and object code for its operations, according to official circulars sent to relevant departments and the accountant generals of all four provinces.

Under the notification, all proceeds received under the Petroleum Prices Stabilisation Fund will be credited to the Public Account of the Federation under the major head “Special Deposit Fund”.

Provincial governments have been directed to complete the necessary administrative arrangements to facilitate the collection and smooth transfer of funds.

The Finance Ministry said the operational framework, rules and procedures governing the fund will be jointly developed by the Finance Division, the Petroleum Division and the Oil and Gas Regulatory Authority (OGRA).

Officials said a separate legal and financial mechanism will be approved later to determine how and when the fund will be used to cushion consumers against sudden increases in petroleum prices.

The initiative follows significant volatility in global oil markets after recent geopolitical tensions, including the US-Israel conflict with Iran, which led to sharp increases in crude oil prices.

Officials noted that Pakistan had previously secured limited crude oil supplies through special diplomatic arrangements, generating savings compared with prevailing market rates. However, those purchases were made under emergency administrative measures rather than through a permanent institutional framework.

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Pakistan, which depends heavily on imported petroleum products to meet its energy requirements, has frequently faced inflationary pressure and balance-of-payments challenges due to fluctuations in global energy prices.

Officials said the creation of the stabilisation fund marks an important institutional step towards improving fuel price stability and supporting the country’s broader economic recovery.