Islamabad: The Ministry of Energy has directed the Oil and Gas Regulatory Authority to finalize a framework transferring responsibility for determining petroleum prices to the oil industry.
In a letter issued Wednesday, the ministry instructed the Ogra chairman to convene a meeting on Thursday to discuss the analysis, implications, and future steps for deregulating petroleum products.
The directive referenced Prime Minister Shehbaz Sharif’s call to delegate pricing responsibilities to oil marketing companies, although notably, the two primary stakeholders — OMCs and dealers — were not invited to the meeting.
Currently, four of the country’s eight petroleum fuels — including jet fuels, hi-octane, and furnace oil — are deregulated, while regulated products include petrol, high-speed diesel, light diesel oil, and kerosene.
The Oil Companies Advisory Committee has long advocated for phased deregulation starting with LDO and kerosene. In August 2022, the government announced plans to allow the oil industry to freely set petroleum product prices, with implementation slated for November 1 of that year.
While OMCs support deregulating remaining fuels, dealers, including petrol pump owners, oppose the move, fearing loss of control over commissions.
Presently, OMCs earn Rs7.87 per litre for petrol and diesel, while dealers earn around Rs8.70 per litre.
Despite pressure from both OMCs and dealers following the recent federal budget, neither stakeholder group was included in the meeting chaired by Energy Minister Musadik Malik.
Industry expert Abid Ibrahim noted the government’s historical confusion over deregulation, emphasizing its implications on pricing and market dynamics.
Meanwhile, some OMC officials viewed the ministry’s meeting on deregulation as a response to their calls for margin increases.
