The federal government has reportedly agreed to deregulate prices of petroleum products that will allow Oil Manufacturing Companies (OMCs) to set their own petrol prices in Pakistan once the the proposed oil policy is approved and comes into effect from 1 November 2022.
It is pertinent to mention that prices of petroleum products in Pakistan like petrol and high-speed diesel (HSD) are regulated by the federal government while the price of furnace oil remains unregulated. However, the federal government is now mulling to give a free hand to OMCs and set their own prices.
According to the details, a federal government has drafted a bill in this regard and it will be submitted to the Economic Coordination Committee (ECC) by mid-September along with OGRA’s recommendations regarding the implications of deregulating the prices of petroleum products.
The decision was taken in a meeting on Wednesday after an agreement between the executives of oil refineries, Minister of State for Petroleum, Musadik Malik, Energy Task Force Chairman Shahid Khaqan Abbasi and officials of the Oil and Gas Regulatory Authority (OGRA).
The stakeholders agreed that products produced locally by oil refineries and those imported by the Pakistan State Oil (PSO) would compete in the local market. Currently, PSO imports at least 50% of the petroleum products, while the rest are procured locally by oil refineries to meet the energy demands of consumers.
It bears mentioning that the government had recently increased the margins of OMCs that would remain effective until November and will be withdrawn once the new oil refinery policy is implemented. Meanwhile, the government has also raised the margins of dealers to Rs. 7 per litre and that would remain in place after the implementation of the new oil refinery policy.
However, the final decision regarding the deregulation of the prices of petroleum products and allowing OMCs to set their own petrol prices in Pakistan will be made in light of the recommendations submitted by the Oil and Gas Regulatory Authority (OGRA).
Read more: Latest Petrol Prices in Pakistan – 1 August 2022.