In a major development just two days before the announcement of the next federal budget, the government announced on Wednesday deregulation of the prices of petroleum products from the next fiscal year.
The Oil and Gas Regulatory Authority (OGRA) notified a Rs 1.70 reduction in the price of petrol, bringing it down from Rs 88.41 to Rs 86.71 per litre, while the price of high speed diesel was reduced by Rs 3.20 from Rs 97.31 to Rs 94.11 per litre, and kerosene by Rs 5.05 from Rs 89.70 to Rs 84.65 per litre from June 1. OGRA will issue the indicative prices of light diesel oil, high octane and jet fuel prices today.
Addressing a news conference, OGRA Finance Executive Director Syed Jawad Naseem said the government decided to deregulate the prices of POL products and from now onwards, the prices would be determined by oil marketing companies. However, OGRA would continue to issue an indicative price for POL products. He said the indicative price would be linked to the cost of supply price of the state-owned Pakistan State Oil that has a more than 70 percent share in domestic oil marketing.
He said that the deregulation was made under an ECC decision of October last year.
The deregulation would reduce the gap between local and imported POL products as the Finance Ministry had to pay the differential to oil refineries, he said, adding that the refineries would be given a target to reduce sulfur content in diesel. After the deregulation, the government would not be paying inland freight equalisation margin to the Pak Arab Refinery and local refineries would be getting the same price for their products as imported ones. The deregulation of the price mechanism was being stressed by international financial institutions as they termed its abolition conducive to further investment in the refinery and the oil marketing sector
Fuel prices revised, deregulated
