The federal government on Monday announced fuel prices for July 21 (Tuesday) in line with the new policy to fix the retail rate daily amidst global disruptions caused by renewed hostilities between Iran and the United States.
According to a notification issued by the Petroleum Division, the price of petrol has decreased by Rs. 0.35 to Rs. 315.80/liter while that of high-speed diesel has increased by Rs. 5.71 to Rs. 360.06/liter. It says the prices would be effective on July 21. The government has also increased the price of kerosene oil by Rs. 5.93/liter to Rs. 282.59/liter.
Last week, Petroleum Minister Ali Pervaiz Malik announced the shift to daily price fixation of fuel prices, breaking from the weekly fixation adopted in March due to the Middle East conflict. Prior to the war, the government would announce fuel prices every fortnight.
In his video statement, Malik said the federal cabinet and Prime Minister Shehbaz Sharif had decided to give the Oil and Gas Regulatory Authority (OGRA) the responsibility of deciding fuel prices on a daily basis based on international market trends. Contrary to his announcement, however, the Petroleum Division rather than OGRA announced the prices. Subsequently, OGRA updated the latest prices on its website.
According to the minister, the daily pricing is based on a seven-day weekly average of international market prices.
The All Pakistan Dealers Association has rejected the daily fixation of prices, while the general public has also expressed unease over the potential for rapid price shifts on a daily basis.
New mechanism
The new pricing mechanism is part of a larger package of fuel-linked decisions approved by the federal government. It has imposed a total ban on importing high-speed diesel by private oil marketing companies, with state-owned Pakistan State Oil (PSO) to solely handle imports for the ongoing fiscal year. Additionally, petrol imports by oil marketing companies have also been capped as per their past sales, with a minimum import parcel of 10,000 tons.
Any company that defaults on its import commitment or defaults in committed uplift from refineries or delays beyond agreed month of delivery would be disqualified from any further import allocation for nine months.
For the purpose of pricing for both petrol and diesel, the import price freight-on-board shall be computed on a seven working days rolling average of the published Platts Arab Gulf assessments for the respective product, i.e. petrol and diesel. “Price will be announced daily by OGRA” and would remain unchanged on Saturday and Sunday, it adds.
The cabinet has conveyed its decisions to OGRA.