The Oil Price Dilemma — Relief for People, Ruin for Industry

I’ll be honest. When I heard that petrol prices were slashed by almost 81 rupees per liter, I felt a wave of relief. Like millions of Pakistanis, I thought, “Finally, some respite from inflation.” We all celebrated. We filled our tanks, bought extra groceries, and smiled at the fuel stations.

But then the other shoe dropped.

The oil industry cried out. And I mean cried out in agony. The unilateral decision to cut fuel prices without proper consultation has pushed Pakistan’s entire petroleum sector to the brink of collapse. According to the Oil Companies Advisory Council, the industry is facing losses of a staggering 105 billion rupees .

Let me put that in perspective. Pakistan has already lost global giants like Shell, Total, and Chevron from its market. And now, with this one decision, we might lose the rest.

Here’s what happened: The government changed the pricing formula — again. For the fourth time in three months. Diesel prices should have dropped by only 30 rupees per liter based on global trends. But the cabinet decided to slash it by 81 rupees instead. Pakistan State Oil alone is facing losses of 50 billion rupees. PARCO will lose another 25 billion. Other refineries and oil marketing companies will collectively suffer over 30 billion rupees in damages .

Now, don’t get me wrong. I understand the government wants to give people relief. Inflation is crushing ordinary families. But at what cost? If oil companies go bankrupt, who will import fuel? Who will maintain the supply chain? Pakistan’s energy security hangs by a thread.

This isn’t just about numbers on a balance sheet. This is about whether you’ll be able to fill your car next month. Whether hospitals will have generators running during power cuts. Whether industries can keep producing goods.

The industry isn’t opposing price cuts for the sake of profits. They’re warning us that we’re killing the goose that lays the golden egg. When international companies left, the domestic sector absorbed the shock. But how much more can they take?

Prime Minister Shehbaz Sharif announced these price cuts with pride . But the petroleum sector warns that such policies without proper deliberation could accelerate the collapse of domestic oil companies .

I’m not saying don’t give people relief. I’m saying do it smartly. Consult the industry. Find a balanced approach. Don’t destroy an entire sector just to win temporary public applause.

Because when the fuel runs out, no one will be clapping. Read my detailed Urdu analysis on this topic.