ICMA Warns Daily Fuel Pricing Is Amplifying Pakistan’s Oil Shock
ICMA urges Pakistan to adopt more predictable fuel pricing as global oil volatility pushes petrol and diesel costs higher.
The Institute of Cost and Management Accountants of Pakistan (ICMA) has warned that Pakistan’s daily petroleum pricing system is increasing short-term uncertainty amid global oil market volatility.
According to ICMA’s latest Economic Signal report, petrol prices rose 16.42% between August 1 and September 17. The price increased from Rs336.03 to Rs391.22 per litre.
High Speed Diesel also recorded a significant increase during the same period. Its price rose 7.41% to Rs421.45 per litre.
ICMA Calls for More Predictable Pricing
The report argues that frequent price changes can make it harder for households and businesses to manage rising costs.
ICMA said greater transparency should not automatically result in daily price volatility. The organisation called for a balance between market-based pricing and greater predictability.
Frequent adjustments can quickly affect transport and freight expenses. Manufacturers and other businesses may also face difficulties when planning production costs and inventories.
Malaysia’s Weekly Model Highlighted
ICMA cited Malaysia’s weekly fuel pricing system as an alternative approach. The model combines market-based adjustments with targeted subsidies.
According to the report, a weekly pricing cycle could give businesses and consumers more time to absorb international price movements. Pakistan’s daily system, by comparison, can transmit external oil shocks more rapidly.
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The report also highlighted the fiscal impact of fuel pricing. The Petroleum Levy stood at Rs80 per litre on September 17.
That levy accounted for more than 20% of the retail price of petrol, according to ICMA. Frequent price changes can also complicate budgeting, export pricing and inventory management.
ICMA Reviews International Approaches
The report examined fuel pricing practices in several other countries.
The UAE and Qatar use monthly pricing windows. India has used excise duty reductions to absorb some fuel price shocks.
Thailand, meanwhile, has temporarily capped diesel prices during periods of market pressure.
These examples show how governments can combine market-based pricing with measures aimed at limiting sudden increases.
Weekly Reset Proposed for Pakistan
ICMA recommended shifting Pakistan toward a weekly retail fuel price reset. The proposed system would use rolling averages of international oil prices.
The organisation also called for a rules-based “shock corridor” to manage exceptionally large price increases. Such a mechanism could phase major adjustments instead of passing the entire increase to consumers at once.
Targeted relief should also replace broad fuel price freezes, according to the report. ICMA suggested focusing assistance on vulnerable sectors such as public transport and essential freight.
Supply Resilience Also Needed
The report called for stronger measures to protect Pakistan’s fuel supply from external disruptions.
ICMA recommended building adequate fuel inventories and diversifying supply sources. It also urged authorities to establish clear emergency protocols for periods of severe market disruption.
The measures could help reduce the impact of international oil shocks on the domestic economy.
Predictability Key to Managing Oil Shocks
ICMA said Pakistan needs to combine market-linked pricing with a clearly defined adjustment schedule.
The report argues that predictable and gradual price increases can help households and businesses manage global oil shocks. At the same time, the approach should maintain fiscal discipline and preserve the link between domestic prices and international markets.
