Pakistan’s oil industry has voiced strong opposition to the government’s proposed amendments to the petroleum pricing formula, warning that the move could disrupt fuel supplies and trigger a crisis at a sensitive time.

The concerns surfaced after a committee formed by Prime Minister Shehbaz Sharif began reviewing the existing oil pricing mechanism. Sources said the panel recommended delinking the inventory cost-based pricing system from international market rates, despite domestic oil prices currently being adjusted weekly in line with global benchmarks.

Industry stakeholders argued that the proposal overlooks the commercial realities of the petroleum business. Oil marketing companies, they said, cannot continue importing fuel at high international prices while being required to sell it domestically at artificially suppressed rates. Such a mismatch, they warned, could discourage imports, undermine supply planning, and erode sector confidence.

Executives also expressed concern over frequent policy shifts, emphasizing that predictability is essential for procurement cycles, inventory management, and financial planning. Unresolved structural issues, including input tax recovery and compensation for exchange losses, were cited as additional strains on oil companies and refineries.

Concerns are mounting over energy availability beyond oil, with the country’s second LNG terminal scheduled to shut down from April 2, coinciding with rising electricity demand ahead of the summer season.