A breakthrough in the Bab-al-Mandeb chokepoint has cleared the way for Pakistan's stranded oil cargoes, raising expectations that petrol and diesel prices may soon decline. Petroleum Minister Ali Pervez Malik confirmed the ships have safely passed, signaling a potential end to weeks of supply disruptions that had kept domestic fuel costs elevated. Main Developments Malik told journalists on Monday that crude oil, diesel, and petrol prices are showing signs of easing in global markets. He attributed this to the safe passage of Pakistan's vessels through the Bab-al-Mandeb strait, where Houthi attacks had previously trapped them. The minister emphasized that the government's transparent pricing formula, operated by the Oil and Gas Regulatory Authority (Ogra), uses weekly averages of international market rates. "If not today, prices will start declining from tomorrow," Malik stated, though he cautioned that the exact timing depends on the weekly average calculation. Read also: 3 key factors behind PSX's 7,000-point surge past 178,000 When asked about reverting to weekly or fortnightly pricing after the crisis, Malik said, "Let the people benefit from the declining trend first, and then we can discuss the future." This suggests the government is prioritizing immediate relief over long-term policy changes. Background The Bab-al-Mandeb chokepoint, a narrow strait between Yemen and Djibouti, has become a flashpoint due to Houthi rebel attacks on commercial shipping. Pakistan's oil cargoes were among those stuck there, disrupting fuel imports and contributing to domestic price pressures. The crisis unfolded as Pakistan's economy was already grappling with high inflation and a depreciating currency, making fuel imports more expensive. The government had earlier shifted to a weekly pricing mechanism to better reflect global market fluctuations. Alongside the price relief news, Malik met with the Oil Tankers Contractors Association (OTCA) to address long-standing grievances. The OTCA delegation, led by president Abidullah Afridi, raised concerns about quota allocations for road transport of petroleum products and freight charges that have remained unchanged since 2023. Why It Matters For Pakistani consumers, a drop in petrol and diesel prices would provide immediate relief from high transportation costs that ripple through the economy. Lower fuel prices can reduce inflation, ease the burden on households, and support business activity. The resolution of the tanker owners' issues is equally critical. Freight charges are largely linked to diesel prices, and the OTCA has demanded that the formula be tied to the Consumer Price Index (CPI) to account for inflation. A committee has been formed to examine these demands, with a report expected Tuesday. The government's ability to maintain uninterrupted fuel supplies during challenging times is a key test of its economic management. Malik stressed that "all stakeholders must work together in the national interest," signaling that cooperation between Ogra, oil marketing companies (OMCs), and tanker operators is essential. What's Next The committee led by the special secretary for petroleum is expected to submit its recommendations within one week. It includes the director general (oil), representatives from Ogra and OTCA, and the secretary general of the Oil Companies Advisory Council (OCAC). Malik has directed Ogra to work closely with stakeholders and instructed OMCs to submit their written policies on freight contract awards. Any discriminatory practices found will be addressed. On pricing, the weekly average formula will determine how quickly the global decline translates into lower pump prices. If the trend holds, consumers could see reductions within days.