Skip to main content

Energy ministry calls for framework to deregulate fuel prices

ISLAMABAD: The Ministry of Energy has instructed the Oil and Gas Regulatory Authority (Ogra) to finalise the framework for transferring the responsibility of determining petroleum prices to the oil industry.



In a letter issued on Wednesday, the ministry directed the Ogra chairman to convene a meeting today (Thursday) to discuss the analysis, implications, and way forward for deregulating petroleum products.



The letter referenced Prime Minister Shehbaz Sharif’s directive to delegate pricing responsibilities to oil marketing companies, but notably, the two main stakeholders — OMCs and dealers — have not been invited to the meeting.



Currently, four of the eight petroleum fuels consumed in the country — jet fuels for air force and airliners, hi-octane, and furnace oil — are deregulated, while regulated products include petrol, high-speed diesel, light diesel oil, and kerosene.




Directs Ogra chief to convene meeting today; two key stakeholders not invited




The Oil Companies Advisory Committee (OCAC) has long advocated for the phased deregulation of the petroleum fuel sector, starting with LDO and kerosene. In August 2022, the government announced that the oil industry would be given a free hand to set petroleum product prices, with the deregulation mechanism to be implemented from Nov 1 of that year.



While oil marketing companies support deregulating the remaining fuels, dealers, including petrol pump owners, vehemently oppose the move, arguing that deregulation would place their commissions under OMC control.



Presently, OMCs earn a margin of Rs7.87 per litre for both petrol and diesel, while dealers earn around Rs8.70 per litre.



Amid pressure from both OMCs and dealers to increase their margins following the recent federal budget, the energy ministry has not included representatives from either stakeholder group in today’s meeting, which will be chaired by Energy Minister Musadik Malik.



Abid Ibrahim, an industry expert and former senior executive of an international OMC, told Dawn that the government has repeatedly shown confusion over the subject in the recent past.



“Deregulation means there is no set formula or percentage for setting margins for both OMCs and dealers. The IFEM or freight margins must be independent for each company, and each company should be free to pass on its import price,” Mr Ibrahim said.



He added that one consequence of deregulation could be varying petrol and diesel prices across different parts of the country and between stations of different companies. “But the positive side is that many companies would invest in quality and service, attracting customers willing to pay more for better fuel,” he noted.



Meanwhile, some OMC officials said the sudden move by the petroleum division to call the meeting on deregulation was an attempt to counter the companies’ demands to raise their margins.



Published in Dawn, July 25th, 2024


http://dlvr.it/TB2PxH

Comments

Post a Comment

Popular posts from this blog

3 drug pushers, bootlegger held

Islamabad :Islamabad Industrial Area Police have arrested three drug pushers and a bootlegger besides recovery of narcotics and 120 liter liquor from them, a police spokesman said.According to details, a police team of Industrial Area police station arrested three drug pushers namely Kamran, Irfan and Shamoon Masih and recovered 320 gram heroin and 210 gram hashish from them,.Another police team arrested a bootlegger namely Ansar Javed and recovered 120 liter wine, bottles, stickers and brewing equipment from him. Cases have been registered against these nabbed persons and further investigation is underway from them.SP (Industrial Area) Zubair Ahmad Shaikh has said that Industrial Area zone police is doing its job efficiently and crackdown against criminals would be continued.Despite the sit in, he said Islamabad Police has been performing its duty quite efficiently and has successfully managed to maintain the daily life in the Capital.In this regard, Senior Police officers including S...
Post a Comment
Read more

‘Aziz Bhatti Shaheed My Brother, My Hero’

Real heroes are heroes of every one. They are not controversial. Nations love them more than anything. Major Aziz Bhatti Shaheed is among those real-time heroes of 1965 War, who not only stood firm to face the enemy aggression but also repulsed it with his unprecedented courage. He gave his life while defending the frontiers of motherland but never let the enemy succeed in its nefarious designs. The proud nation awarded him with ‘Nishan-i-Haider’, the biggest gallantry award of the country. Now that more than 54 years have passed, since he embraced Shahadat, he continues to live in the hearts of each and every Pakistani. Aziz Bhatti is remembered with love and affection. Nation observes his Yaum-e-Shahadat on 12th of September in a befitting manner.This year was significant in a sense that his younger brother Sardar Ahmed Bhatti (95 years old now) presented this nation a book named ‘Aziz Bhatti Shaheed My Brother My Hero’. This book is classic and unique in a way that it unearths many ...
Post a Comment
Read more

Pragmatic steps taken to implement Axle Load Control regime on NH&MP

Islamabad: Ministry of Communications has taken pragmatic steps to implement the Axle Load Control regime on Motorways & National Highways in the country. Sole objective of this move is to control travelling of overloaded vehicles which lead to fatal accidents besides damaging the national asset of road network of billions of rupees.Prior to implementation of axle load control regime, a technical committee was formed, consisting of officers from Ministry of Communications and National Highway Authority which remained in constant contacts with transport community, Members of the Chambers of Commerce and stakeholders hailing from all the provinces. This technical committee visited their offices and held detailed discussions in series of meetings and took them into confidence to facilitate implementation of Axle Load Control regime. The stakeholders assured of their full cooperation and subsequently, implementation of Axle Load Control was realized which is in progress.It is worth to ...
Post a Comment
Read more