Petroleum Price Stabilization Fund formed to buffer future Oil Price Shocks

ISLAMABAD – Pakistani government formed new financial mechanism aimed at bringing greater stability to petroleum prices, establishing Petroleum Prices Stabilization Fund, laying the groundwork for a buffer against future fuel price shocks. The fund has been set up in line with a federal cabinet decision taken on June 5, 2026, with the objective of minimizing the impact of sharp fluctuations in petroleum product prices and ensuring greater price stability in the future. Ministry of Finance also decided to create separate account head within the Public Account of the Federation to manage all financial transactions related to the fund in a transparent and organized manner. Under the new mechanism, all funds allocated or received for the Petroleum Prices Stabilization Fund will be deposited into the designated account, while its operational framework will be jointly finalized by the Ministry of Finance, the Petroleum Division, and the Oil and Gas Regulatory Authority (OGRA). The notification further said that all required legal and financial approvals will be obtained separately before the fund becomes fully operational, ensuring compliance with the relevant laws and financial regulations. The establishment of the Petroleum Prices Stabilization Fund marks one of the government’s most significant steps toward creating a financial buffer against unpredictable movements in global oil prices. Once operational, the fund is expected to provide the government with a mechanism to soften the impact of sudden increases or decreases in petroleum prices, helping maintain greater stability in the domestic fuel market. How much could Petrol Prices in Pakistan fall with Iranian Oil Imports? EXPLAINED