ISLAMABAD: The federal government has formally established the Petroleum Prices Stabilisation Fund (PPSF), introducing a dedicated mechanism aimed at mitigating the impact of fluctuations in international oil prices and ensuring greater stability in domestic petroleum pricing.
The fund has been created following the Federal Cabinet’s approval (Case No. 388/Rule19/2026/462) dated June 5, 2026, according to an official notification issued by the Finance Division on Monday.
Under the notification, all receipts generated in the name of the PPSF will be credited to the Public Account of the Federation under a newly created accounting head: Major Head G12 – Special Deposit Fund, Minor Head G123 – Economic Fund, Detailed Object G12314 – Petroleum Prices Stabilisation Fund (PPSF).
The initiative is part of the government’s broader strategy to institutionalize a sustainable petroleum pricing mechanism amid persistent volatility in global crude oil markets and increasing fiscal pressures linked to fuel price adjustments.
According to official sources, the establishment of the PPSF has been under consideration for some time, with recent developments in the global energy market accelerating its implementation. Similar stabilization mechanisms are already in place in several countries, where funds are accumulated during periods of lower oil prices and utilized to shield consumers when international prices rise.
The Finance Division clarified that the operational framework of the fund is still being developed. The Finance Division, Petroleum Division, and the Oil and Gas Regulatory Authority (OGRA) will jointly formulate the fund’s governance structure, operating procedures, and legal and financial framework before submitting the mechanism for final government approval.
The government has circulated the notification to key institutions, including the Auditor General of Pakistan, Controller General of Accounts, Accountant General Pakistan Revenues, provincial accountants general, the State Bank of Pakistan, the Presidency, Prime Minister’s Office, Cabinet Division, Ministry of Law and Justice, Ministry of Energy (Petroleum Division), and provincial governments for implementation and coordination.
In an indication that the fund may receive voluntary contributions in addition to government receipts, the Finance Division has requested the chief secretaries of Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, Azad Jammu and Kashmir, and Gilgit-Baltistan to make the necessary arrangements for accepting donations to the PPSF.
Meanwhile, the Press Information Department (PID) has been directed to ensure extensive public awareness of the initiative through both electronic and print media.
While the establishment of the fund marks a significant policy step toward managing fuel price volatility, the government has yet to disclose key details, including the fund’s initial capitalization, long-term financing sources beyond voluntary donations, and the specific conditions under which its accumulated resources will be utilized to stabilize petroleum prices.
Story by Tahir Amin
