ISLAMABAD, Oct 20 (APP):Federal Minister for Petroleum Ali Pervaiz Malik on Tuesday said petroleum prices were determined on the basis of a seven-day average under a transparent formula.
Responding to a calling attention notice regarding the daily determination of petroleum prices instead of the fortnightly mechanism, the minister said the Oil and Gas Regulatory Authority (OGRA) set prices according to the seven-day average. He added that the authority had also published the formula on its website.
Referring to the previous practice of revising petroleum prices every 14 days, Ali Pervaiz Malik said prices had earlier been revised annually and later on a monthly basis.
He said Pakistan imported all its oil requirements, while volatility in international markets made it necessary for the government to ensure an uninterrupted supply chain and prevent profiteering and hoarding.
The minister said keeping domestic petroleum prices close to international market rates helped ensure that changes in global prices were reflected in local prices. This approach also helped maintain the security of the supply chain, he added.
He said the trend in international oil prices became clearer after three to four days, indicating whether prices were rising or falling. The existing pricing mechanism helped improve fuel availability at petrol pumps and reduce difficulties faced by consumers, he added.
Ali Pervaiz Malik said the government had adopted the seven-day average mechanism to address supply-related problems and ensure the availability of petroleum products.
The minister also informed the House that, at the prime minister’s request, refineries had once again reduced their gross refining margins. He said a cap of $38 had been imposed on the crack margin.
He said the measure had led to a reduction of Rs7.69 per litre in the price of high-speed diesel the previous day, while petrol prices had also witnessed a considerable decrease.
Source: APP (Associated Press of Pakistan)
