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The government is swiftly taking steps to deregulating petroleum prices in response to concerns over escalating fuel costs and the impact of illicitly traded oil products on the market. The Petroleum Division has directed the Oil and Gas Regulatory Authority (OGRA) to present an analysis and potential consequences of deregulating petroleum products within a three-day timeframe. According to a national daily, the authorities’ objective is to redirect criticism from the government to oil marketing companies.
Additionally, deregulation would empower oil companies to independently determine prices for MS petrol and high-speed diesel (HSD) in various cities and towns. Although legally petroleum prices are already deregulated, kerosene prices remain the only ones officially established by the government.
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With the proposed framework, OGRA and the Competition Commission of Pakistan would assume greater responsibilities 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 impacts of widespread smuggling on government revenue and domestic refineries. They express concerns that such activities could jeopardize planned investments in refinery expansion and upgrading projects aimed at meeting environmentally-friendly specifications.