Government Rushes to Enable Pump Owners to Determine Petrol Prices

The government is speeding up efforts to deregulate petroleum prices due to worries about rising fuel costs and the effects of smuggled oil on the market.

The Petroleum Division has directed the Oil and Gas Regulatory Authority (OGRA) to provide an analysis of the implications of deregulating petroleum products within three days. The objective is to shift criticism from the government to oil marketing companies, as per a report by a national daily.

If deregulation were to occur, oil companies would effectively be given the power to set the prices for MS petrol and high-speed diesel (HSD) in different cities and towns. The only prices that the government formally sets are still those for paraffin, even though petroleum prices are already legally deregulated.

Under the proposed framework, OGRA and the Competition Commission of Pakistan would assume a more prominent role in ensuring product quality, availability, and competitive pricing to prevent market collusion.

The Oil Companies Advisory Council (OCAC) has recently cautioned the federal government about the adverse effects of widespread smuggling on government revenue and local refineries. OCAC is concerned that unchecked smuggling could impede planned investments in refinery expansion and upgrading projects aimed at meeting environmentally friendly specifications.

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