Petroleum pricing reforms should extend beyond daily fuel price revisions if Pakistan wants to modernise its energy sector, according to a leading economic analyst.

Shahid Anwar, former secretary general of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said the current debate has focused too heavily on how often fuel prices should change.

“The real policy question is not the frequency of price revisions,” Anwar said. “The key issue is who should bear the market risk created by fluctuations in international oil prices—the government, oil marketing companies or consumers.”

He argued that resolving this issue would determine whether the proposed system delivers meaningful reform or remains only an administrative change.

The government is considering replacing weekly fuel price reviews with daily petroleum price revisions under a new mechanism that would allow the Oil and Gas Regulatory Authority (OGRA) to determine retail fuel prices.

The proposal follows increased volatility in global oil markets after renewed tensions around the Strait of Hormuz.

Anwar said many countries already use market-based fuel pricing because it allows retail prices to reflect changes in international oil prices and exchange rates more quickly and transparently.

However, he stressed that changing the timing of price notifications alone would not solve Pakistan’s energy sector challenges.

“Daily petroleum pricing is an operational reform, not an economic reform,” he said. “Success depends on transparency, fair competition, efficient price transmission and stronger public confidence.”

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Anwar outlined four key principles for implementing the new pricing system.

He said transparency must remain the government’s top priority. Every daily fuel price notification should clearly explain the impact of international oil prices, exchange rate movements, petroleum levy, taxes, dealer commissions, freight charges and oil marketing company margins.

“Consumers have the right to know how the final retail price is calculated,” he said.

Anwar also warned against relying too heavily on petroleum taxes to generate government revenue. He said excessive taxation raises transport, logistics and production costs, increases inflation and weakens Pakistan’s industrial competitiveness.

He also called for equal treatment of all market participants.

“If consumers absorb higher international oil prices immediately, they should also receive the full benefit when global prices decline,” he said. “Prices must fall as quickly as they rise.”

Anwar said daily fuel price revisions should support a wider energy reform strategy rather than operate as a standalone policy.

He urged the government to modernise refineries, reduce dependence on imported fuels, promote domestic energy production, expand renewable energy investment, improve energy efficiency and strengthen long-term energy security.

He also recommended publishing a detailed daily fuel price breakdown and ensuring regulators pass international price reductions on to consumers promptly.

“I urge the energy minister to make daily petroleum pricing the foundation of a transparent, predictable and competitive energy market,” Anwar said.

The proposal has faced opposition from the Oil Marketing Association of Pakistan, which warned that immediate implementation could create operational and financial difficulties for oil marketing companies.

The All Pakistan Petrol Pump Owners Association has also rejected the proposal and warned it could stage protests if authorities proceed with the plan.