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THE government’s move to daily petroleum price adjustments should make fuel pricing more transparent and more closely aligned with global market and exchange rate trends. Under the new system, Ogra will set prices daily, using Platts benchmark rates, and disclose all price components to improve transparency. The mechanism ensures that global price changes are passed on to consumers promptly, reducing delays and limiting political intervention. Introduced amid conflict-driven volatile global oil markets, the daily adjustments are expected to distribute the impact of global price hikes more gradually. Besides reducing the frequency and severity of price shocks, they can help make the pricing system more transparent and efficient, and discourage panic buying. Daily revisions can discourage hoarding and speculative inventory gains by petrol pump owners, while protecting them against inventory losses caused by sudden price changes. The new mechanism can reduce political discretion in fuel pricing by allowing market movements to determine retail prices. Thus the government will be less likely to delay increases for political reasons or delay reductions for fiscal considerations.
