The Pakistani government has announced its decision to allocate approximately Rs48 billion to Oil Marketing Companies (OMCs) to cover price differential claims as part of its strategy to stabilize fuel prices. This move comes in response to the government’s rejection of a proposed fuel price hike, as confirmed by a letter from the Ministry of Energy’s Petroleum Division addressed to the Oil and Gas Regulatory Authority (Ogra).
According to the letter dated March 20, 2026, the government will compensate Oil Marketing Companies with a price differential of Rs176.41 per litre on high-speed diesel and Rs77.98 per litre on petrol. These payments are scheduled from March 21 to March 27, with the Finance Division facilitating the process through Ogra.
Prime Minister Shehbaz Sharif announced the decision during a national address, emphasizing the government’s commitment to maintaining current fuel prices despite rising global oil prices. The announcement coincided with the festival of Eid ul Fitr, highlighting the government’s sensitivity to public economic pressures during this period.
The decision follows a backdrop of escalating global oil prices due to geopolitical tensions, particularly the conflict involving Iran, the US, and Israel, which has led to the closure of the Strait of Hormuz. This strategic waterway’s disruption has significantly impacted oil shipping routes, causing a surge in prices.
Prime Minister Sharif highlighted the severe economic implications, noting that global oil prices have spiked from $72 to $158 per barrel. He warned that this situation might exacerbate inflationary pressures within Pakistan. Despite these challenges, the government has opted to bear the financial burden to prevent further economic strain on its citizens.
Published in SouthAsianDesk, March 21, 2026
Follow SouthAsianDesk on X, Instagram and Facebook for insights on business and current affairs from across South Asia.
