Brent price swings have little relevance to Pakistan’s fuel pricing

ISLAMABAD: Fluctuations in international oil prices are currently being driven largely by developments related to the Iran conflict and statements from the United States’ top leadership. However, the widely cited Brent crude benchmark has limited relevance to how petroleum prices in Pakistan are actually determined.
Pakistan’s crude supply benchmark is largely linked to the Dubai crude benchmark, which recently closed at around $134.4 per barrel (FOB). After adding premium, insurance and logistics costs, the landed price works out to roughly $144 per barrel.
More importantly, domestic fuel prices are not determined directly by crude oil prices. Pakistan follows a regulated pricing mechanism based on Platts benchmarks for refined petroleum products. Under this system, petrol and diesel prices are calculated using the average international product price during the relevant pricing period.
Currently, international product prices are roughly $120 per barrel for petrol and about $170 per barrel for diesel.
A more informed debate on energy pricing requires an understanding of the difference between crude oil benchmarks and refined product pricing mechanisms, rather than drawing conclusions from unrelated global price indicators.
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