Decision made to delay deregulation of diesel until January, explains PSO

KARACHI: Providing an explanation regarding the content published in the Jang newspaper, the Pakistan State Oil (PSO) has elaborated that the PSO did not have monopoly over the import of petroleum products; however, it added that all the oil marketing companies had the permission to import petroleum products, including high speed diesel, motor gas, jet fuel, light diesel oil and furnace oil.

The reality is that many oil marketing companies, including Shell, Total, PARCO, are importing petroleum products for the past few years. The company added that when it came to the recently announced decision of deregulation policy, the biggest decision in this policy was to deregulate the profits—or margins—on the high speed diesel (HSD).

It further added that all oil marketing companies and dealers will determine their own profits, or margins, on the HSD. However, according to the Ministry of Energy’s latest notification issued on Nov 30, 2017—the copy of which is also available on the website of the said ministry—the deregulation of diesel has been delayed till January, 2018; therefore, there will be no change in the margin of the HSD for the time being and everything will be decided in accordance with the timeline set by the government of Pakistan.

It must also be clear that no decision has been reached to deregulate motor gasoline; and the profits, or margins, of oil marketing companies and dealers on motor gasoline are set by the Pakistan government.

On the other hand, the deregulation of diesel will have no impact on the import of petroleum products in Pakistan because the local refinery has not been able to fulfil the demands of the country due to lesser production capacity. This is the reason why  HSD is being imported for the past 40 years.