The Ministry of Energy (Petroleum Division) briefed the Standing Committee on Cabinet Secretariat regarding the recent exorbitant price hike in Petrol and Diesel products, causes, and remedial measures undertaken to reduce the suffering of poor people.
The ministry officials said that at present, prices of petroleum products in Pakistan are determined as per the “pricing of petroleum products policy” of the Ministry of Energy (Petroleum Division) notified vide letter No. PL-3(457)/2019 dated 24.08.2020 (Annex-I).
As per the existing policy, prices of Petrol (MS) and Diesel (HSD) are linked with the average of ‘Daily Arab Gulf Prices,’ PSO’s Premium, and its incidental costs of cargos imported during the previous fortnight period, they said.
It was mentioned that the Prices of MS and HSD in the country are directly linked with international prices of petroleum products and Dollar Rupee parity ($: Rs).
Following is a comparison of international Prices, PSO’s Costs, and Exchange Rate:
The following table illustrates the break-up of ex-depot prices of MS and HSD, depicting the impact of other price components on POL prices in addition to levies, taxes, and duties imposed by the Federal Government. However, revision of rates levies taxes and duties is the discretion of the Federal Government.
In view of the given situation, the Petroleum Division made the following suggestions:
- Development of storages at a large scale similar to India and China to absorb abrupt price hikes in the international market.
- Industry cargo size is enhanced up to 60,000 to 80,000 MT to save freight, premiums, etc., and necessary facilities are developed to cope with interlink challenges at ports.