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Petrol Companies Urge Govt to Avoid Shifting to Weekly Oil Price Revision

Oil marketing companies have appealed to the caretaker federal government to avoid shifting to a 7-day cycle for announcing revisions in the prices of petroleum products.

Chairman of the Oil Marketing Association of Pakistan (OMAP) Tariq Wazir Ali urged the Ministry of Petroleum and the Oil and Gas Regulatory Authority (OGRA) to reconsider the move.

He warned that such a move would badly impact Pakistan’s already troubled Oil Marketing Companies (OMCs).

The OMAP Chairman said issues such as narrow margins, significant FX losses, a PSO-benchmarked pricing mechanism, negative IFEM, delayed ICFS settlements, and complex sales tax adjustments have already made the business a dismal affair for OMCs.

He said the suggested weekly modifications will only worsen OMCs’ issues, increasing uncertainty and mental strain for both the companies and their end customers.

He added that frequent and unpredictable variations in fuel costs will have a negative effect on other industries like transportation and logistics. This approach not only threatens the delicate balance of the oil industry but could create panic in the overall economy. He lamented that implementing such a measure could have far-reaching and negative consequences for both OMCs and customers’ purchasing decisions.

The OMAP chairman urged the Oil and Gas Regulatory Authority (OGRA) to reconsider this proposal in light of the industry’s vulnerable situation and the detrimental consequences for the economy.

He opined that in the current circumstances, OGRA and the Petroleum Ministry should avoid making such changes. Instead, he encouraged a broad discourse with industry stakeholders in order to develop more long-term and informed solutions that are in everyone’s best interests.

Notably, the Oil and Gas Regulatory Authority (OGRA) last week began consultations with petroleum dealers and companies for feedback on shifting to a 7-day cycle for petroleum rate revisions. So far, the proposal has been met with opposition from petroleum dealers, who are against changing the revision schedule.

Source: Pro Pakistani