Pakistan Moves Toward Deregulating Petrol and Diesel Prices

The federal government is moving toward deregulating petrol and diesel prices as it expects the Economic Coordination Committee (ECC) to approve the long awaited refinery upgrade policy by July 15, Petroleum Minister Ali Pervaiz Malik said on Tuesday.

Briefing the National Assembly Standing Committee on Petroleum, Malik said the refinery upgrade policy has been submitted to the federal cabinet and will pave the way for modernizing Pakistan’s refineries and producing Euro V standard fuels once approved.

The minister said the government is gradually reducing its role in determining petroleum prices and shifting toward a market based pricing mechanism. He added that fuel prices have been announced transparently for the past two decades and the country is now moving toward deregulation.

Malik said the government will not pass the cost of refinery inefficiencies on to consumers and remains committed to protecting the public from additional financial burdens.

He also explained why domestic fuel prices remain high despite lower international crude oil prices. Pakistan imports nearly 70 percent of its petrol and around 33 percent of its diesel requirements, while higher refining, insurance, and shipping costs continue to keep imported fuel expensive.

The minister added that although crude oil prices have returned to pre conflict levels, prices of refined petroleum products have not fallen at the same pace. He also noted that petroleum levy and carbon levy rates remain below the levels imposed on February 27, but imported fuel costs continue to limit any reduction in domestic prices.

During the meeting, lawmakers also raised concerns over the implementation of official LPG prices and the use of corporate social responsibility funds by petroleum companies. The committee directed the Petroleum Division to provide further details on the utilization of billions of rupees in unspent CSR funds in Sindh and Balochistan.