ISLAMABAD: The government has officially decided to deregulate the oil sector and has directed OGRA to formulate the procedure in consultation with oil refineries and marketing companies.
According to media reports, a senior official said that the government has asked Ogra to set terms and conditions for deregulation of the oil sector to promote competition and efficiency.
Oil meets 31 percent of the country’s energy needs, despite this lucrative figure no refinery has been set up for over a decade, nor has the pace of upgrading existing refineries kept pace with the latest technology. went
The move comes at a time when the government and OGRA have been struggling with competition and efficiency in a very small segment of the petroleum sector, Liquefied Petroleum Gas (LPG), despite 2 decades of deregulation and more than half of supply based on domestic production. There is a challenge in making sure.
Yesterday, OGRA issued instructions to Chief Secretaries and district officials to ensure that LPG is sold on September 1 at the prices notified by OGRA, which is Rs 2,13 per 11.8 kg cylinder for producers. And the sale has been announced for consumers at 2 thousand 496 rupees.
On the other hand, its price in the market is between Rs.2700 to Rs.3000 per cylinder and it is continuously increasing due to the increasing demand of flood affected people and donors for normal winter needs.
OGRA has directed district authorities to initiate action against profiteers, LPG plants and distributors have also been directed to sell LPG at gates/passes and receipts for the convenience of common people. Clearly state the value of
Ogra will be better able to issue such directives without any punitive action after petrol prices are deregulated, an official said.
OGRA has called a consultative meeting of all refineries, marketing companies and marketing associations including Oil Companies Advisory Council (OCAC) and Oil Marketing Association of Pakistan (OMAP) on September 7.
All stakeholders have been asked to submit their proposals on deregulation of the oil sector, officials said, adding that deregulation is meant to allow private companies to fix oil prices and facilitate retail distribution. .
These companies will be free to set their own prices on a competitive basis instead of getting a government-mandated distribution margin.
Senior officials handling the retail oil marketing business believe that the deregulation will get rid of the uniform ex-depot price set by the government across the country through the freight equalization margin.
As a result, these prices may be cheaper by Rs 2-3 per liter in Karachi, Multan and Rawalpindi because of the presence of refining in these cities, but may increase to Rs 6-8 per liter in rural and remote areas.
Some senior politicians in the government are pushing for deregulation on the grounds that it will promote competition and free consumers to choose better prices and better quality, sources said.
However, they did not review the market where no one, not even the Petroleum Division or OGRA in Islamabad could confirm which company or retail pump was offering the best product.
The government has formally agreed with the oil industry to also deregulate the IFEM mechanism, which is currently used to keep prices consistent across the country.
This means that these prices will vary significantly from city to city and from oil company to oil company, with consumers close to ports and refineries benefiting while those further away pay more. Depending on the cost of transportation, the difference can be between Rs.1 to Rs.5 per litre.
