The Pakistani government announced it will pay oil companies Rs23 billion to keep petrol and diesel prices unchanged. This comes despite rising global oil prices.
Tensions between the US, Israel, and Iran have pushed crude prices higher worldwide. Analysts predicted a sharp domestic increase, with petrol expected to rise by Rs49.63 per liter and diesel by Rs75.05 per liter during this week’s review.
However, Prime Minister approved a freeze on fuel prices. The Petroleum Division confirmed that the government will cover the price gap, directly compensating oil companies. This ensures consumers are protected from international market fluctuations.
The official notification states that Price Differential Claims (PDC) for March 14–20, 2026, are estimated at Rs23 billion. The Oil and Gas Regulatory Authority (OGRA) will manage the payments to the oil companies.
To fund this payout, the Ministry of Finance secured cabinet approval to establish the “Prime Minister’s Austerity Fund.” The Economic Coordination Committee (ECC) has cleared Rs27.1 billion for the fund, of which Rs23 billion will go to OGRA for distribution to oil companies.
OGRA has been tasked with creating a transparent payment procedure. This includes verification and auditing of bills submitted by oil marketing companies to ensure accountability. The regulatory body will implement these measures immediately.
Experts say this move highlights the government’s commitment to shielding consumers from global price shocks. At the same time, concerns remain about the sustainability of absorbing such massive costs if oil prices continue to rise.
This unprecedented decision marks one of the largest payouts to oil companies in recent history. Citizens will benefit from stable fuel prices, while authorities closely monitor market volatility and the impact on public finances.
The initiative demonstrates the government’s willingness to spend billions to maintain price stability, reinforcing consumer protection amid uncertain global oil markets.
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