Govt yet to decide on fuel price deregulation

ISLAMABAD: With petroleum dealers threatening a nationwide strike over the government’s proposed fuel price deregulation, the Petroleum Ministry on Thursday assured lawmakers that no decision had been made and that stakeholders, including dealers, would be consulted before any move.

The All-Pakistan Petroleum Dealers Association (APPDA) has given the government until March 4 to address their concerns, arguing they were excluded from discussions on deregulation.

The National Assembly’s Standing Committee on Petroleum, led by MNA Syed Mustafa Mehmood, directed the Petroleum Ministry to engage with dealers before finalising any decision. Officials from the ministry acknowledged ongoing debates on whether fuel prices should be revised daily or weekly but confirmed no final decision had been made.

The Oil and Gas Regulatory Authority (Ogra) chairman downplayed the strike threat, calling it a misunderstanding. “Dealers fear oil companies may reduce their profit margins under deregulation,” he said. The committee has summoned Ogra officials and APPDA representatives for further discussions.

“How can such a key decision be made without consulting a major stakeholder?” an APPDA representative told The News when contacted. He said that the petroleum minister’s earlier statement put dealers in an awkward position by suggesting that deregulation had already been decided, pending only the prime minister’s approval. “Our main concern is the status of our profit margins if deregulation happens. Who will decide them?” he said. “We are 15,000 dealers, yet the government never consulted us or sought our input.” He also raised concerns over lubricant and high-octane deregulation, arguing that prices remain high despite fluctuations in the currency exchange rate and global crude prices.

Meanwhile, lawmakers flagged Sui Southern Gas Company’s (SSGC) agreement with Jamshoro Joint Venture Limited (JJVL), warning that it could reduce local gas supplies. The SSGC managing director confirmed the deal’s potential impact, prompting the committee to demand a full briefing in the next session.

The panel also recommended scrapping the proposed Strategic Underground Gas Storage (SUGS) project, citing financial infeasibility. The Inter State Gas Systems (ISGS) had requested Rs1.713 billion for a feasibility study, but both the Petroleum Ministry and the committee opposed the plan. Additional Secretary of the ministry said this $1 billion to $1.5 billion project would store only nine LNG cargoes and add a cost premium to imported gas. “We are not convinced on this project,” he said.