Ijaz Kakakhel Islamabad
A legislative body of upper house of parliament on Friday took notice of the disparity in Petroleum Prices in comparison to the Int. market which has gone down whereas prices in Pakistan are continuously increasing.
These views were expressed in Senate Standing Committee on Petroleum, which held today at Parliament House, while Senator Abdul Qadir was on chair. Members of the committee were of the view that the POL prices on decline in international market and regretted that in Pakistan it was on rise. However, the committee was informed that POL prices will further escalate due to agreement with IMF.
The committee also discussed in detail the deregulation of price determination of petrol and diesel. Chairman OGRA argued that we need to understand the mechanism before deciding deregulation of prices of the petroleum products. He said that 55 percent of the market share is with the PSO and their prices are the bench mark while the rest 33 players cannot cartelize the market price as their market shares are less. It was also informed that the 13 percent incidentals including premium, insurance, testing cost, exchange losses are also paid by the PSO.
Senator Fida Muhammad said that major Gulf markets tracked lower oil prices on 15 August as 97$/ Barrel which exceeded to 127 $/ Barrel for Pakistan and lamented that no difference was impacted on the oil price in the country even after the drop.
The committee was informed that the 10 percent custom duty on diesel is Rs22.21. The levy on petroleum is Rs 37.42 and Rs 7.58 on diesel with no GST on either of them. The committee was informed that the levy charges tend to increase by Rs13 for petrol and Rs33 for diesel. The committee was informed that the OGRA checks the arithmetic accuracy of the price determined by the OMC as per fixed formula given by GoP, worldwide 60 percent of the countries have deregulated where OMCs fix and announces the price on competitive basis with some obligation of maintaining minimum stock level, rest of the 40 pc have regulated prices regime and moved towards deregulation including Pakistan.