The government is moving quickly to deregulate the prices of petroleum products to address concerns about rising fuel prices and the impact of smuggled oil products on the market.
The Petroleum Division has instructed the Oil and Gas Regulatory Authority (OGRA) to provide analysis and implications of deregulating petroleum products within three days. Authorities aim to shift criticism from the government to oil marketing companies, reported a national daily.
Deregulation would essentially allow oil companies to set their own prices for MS petrol and high-speed diesel (HSD) across different cities and towns. While legally petroleum prices are already deregulated, kerosene prices are the only ones officially set by the government.
Under the new framework, OGRA and the Competition Commission of Pakistan would play a larger role in ensuring product quality, availability, and competitive pricing to prevent market collusion.
Oil Companies Advisory Council (OCAC) recently warned the federal government about the detrimental effects of rampant smuggling on government revenue and local refineries. They fear it could jeopardize planned investments in refinery expansion and upgrading projects aimed at meeting environment-friendly specifications.
Despite discouraging the smuggling of Iranian oil, this will provide a legal cover to sell the smuggled oil on pakistani pumps