ISLAMABAD: The government is set to move toward deregulation of petroleum prices as it expects approval of its refinery upgrade policy from the Economic Coordination Committee (ECC) by July 15, Petroleum Minister Ali Pervaiz Malik said Tuesday, paving the way for modernization of refineries and production of Euro-V standard fuels.
Malik told the National Assembly Standing Committee on Petroleum that the refinery upgrade policy had been submitted to the Cabinet and would launch the long-delayed modernization process once approved.
“After approval of the policy, the refinery upgradation process will begin,” he said, adding that Pakistan was working to shift toward Euro-V standard fuels. The minister ruled out passing the cost of refinery inefficiencies onto consumers, saying the government was committed to protecting consumers from additional financial burdens.
Ali Pervaiz Malik said the government was gradually reducing its role in setting petroleum prices and moving toward a market-based mechanism. “Petroleum prices have been announced transparently for the last two decades, and we are gradually moving toward deregulation,” he said.
A committee formed by Prime Minister Shehbaz Sharif had already held three meetings to review reforms in the petroleum pricing system, including a proposal to display prices daily. The minister said crude oil prices had returned to pre-war levels, but Pakistan’s heavy reliance on imported refined petroleum products was keeping fuel prices higher.
“Crude oil prices have come back to pre-war levels, but because we import a major portion of our petrol and diesel requirements, refined fuel prices are still higher,” he said.
He said Pakistan imports around 33 per cent of its diesel requirements and nearly 70 per cent of petrol consumption, while premium, insurance and shipping costs had increased significantly during the recent global disruption. Malik said petroleum levy and carbon levy rates were currently lower than the levels imposed on Feb. 27, but fuel prices had not returned to earlier levels because imported refined products remained expensive.
Meanwhile, the committee, chaired by Syed Mustafa Mehmood, expressed concern over billions of rupees in unused corporate social responsibility (CSR) funds in Sindh and Balochistan.
Provincial officials told the committee that Sindh had started receiving CSR funds from petroleum companies in 2020-21 but could not utilize them due to the absence of guidelines. They also said that around Rs3 billion in Balochistan’s CSR funds remained blocked due to force majeure issues. The committee questioned the use of CSR funds by the government for consultants and international arbitration proceedings and sought details from the Directorate General Petroleum Concessions.
