Saturday May 18, 2024

Govt to deregulate fuel prices in phases: OGRA chief

By Tanveer Malik
May 08, 2024
A fuel station worker refills a cars petrol tank. — AFP/File
A fuel station worker refills a car's petrol tank. — AFP/File

KARACHI: The government will deregulate petroleum prices in phases, taking all stakeholders into confidence, the chairman of the Oil and Gas Regulatory Authority (OGRA) said on Tuesday.

"The deregulation of petroleum prices will be undertaken in phases," Mansoor Khan, OGRA chairman told a group of journalists at the authority's headoffice in Islamabad. "The relevant stakeholders, from dealers to oil marketing companies (OMCs), will be taken on board before going for the deregulation of petroleum products," Khan said when he was asked about the deregulation of High Speed Diesel (HSD) and petrol, and when it would be done after the government announced their deregulation.

Last month, the Petroleum division had sought input from OGRA on the analysis and implications of the deregulation of petroleum products, following instructions from the Prime Minister’s Office for the urgent finalisation of a “deregulation framework for the petroleum sector," as the government has been continuously facing criticism for revisions in their prices, which have mostly shot up in the last two years.

The deregulation proposal received opposition from the refineries and petroleum dealers.The deregulation proposal seeks to empower oil marketing companies to determine fuel prices on the basis of various market forces. Local consumers getting petrol and diesel from places closer to ports and refineries would get relatively cheaper products due to the transportation cost.

The petroleum dealers warned that the deregulation of petroleum prices in Pakistan would negatively impact their business.The refineries said the deregulation could jeopardize nearly $6 billion of investment, as it is better to spend money on upgrading the refineries since it would not only result in cleaner and environment-friendly fuels of Euro-V specifications but would also help save precious foreign exchange by substantially increasing local production.

About the reservations of petroleum dealers and refineries, OGRA chairman said that "deregulation is a vast area and is a challenging one, and all segments of the oil industry would be engaged before any final decision."