ISLAMABAD – Pakistani government has announced to pay oil companies staggering Rs23 billion in latest bid to control prices of petrol and diesel, despite skyrocketing global oil prices.
The move comes as tensions between US and Israel against Iran continue to push crude oil prices upward worldwide. Analysts predicted massive increase in Pakistan, with petrol set to jump by Rs 49.63 per liter and diesel by Rs 75.05 per liter during the weekly review.
But in a bold decision, PM approved keeping fuel prices frozen, shielding consumers from the surge. Petroleum Division confirmed that the government will cover the entire gap between domestic and international oil market prices, directly compensating oil marketing companies.
According to the official notification, Price Differential Claims (PDC) for period March 14–20, 2026, are estimated at Rs23 billion, to be paid by the Oil and Gas Regulatory Authority (OGRA).
To fund this unprecedented payout, Ministry of Finance secured cabinet approval to establish “Prime Minister’s Austerity Fund”, while Economic Coordination Committee (ECC) has cleared Rs27.1 billion for the fund, 23 billion of which will be channeled to OGRA.
OGRA has been tasked with designing the full payment procedure, including verification and auditing of bills submitted by oil marketing companies, ensuring transparency in this massive transfer of funds.
The regulatory body has been directed to take immediate steps to implement these measures and complete the payments, signaling a government ready to spend billions to shield citizens from global market volatility.
This bold move underscores the government’s commitment to consumer protection, but it also raises questions about the sustainability of absorbing such massive costs in the face of global oil market turbulence.
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