Federal Government comes up with a new method to determine the prices of petroleum products

Pakistan State Oil (PSO) has been removed as the import price benchmark for fixing the prices of petroleum products in Pakistan.

The Federal Government has come up with a new method to fix the prices of petroleum products. The latest development states that prices will be revised every 15 days instead of every month.

This new method of determining prices is very likely to result in more frequent price hikes and drops. Various factors like fuel shortage, exchange rate fluctuation, and more are expected to affect the new petroleum price.

The Directorate General Petroleum Division of the Federal Ministry of Energy has issued a letter stating the new pricing method for petroleum products to the Oil and Gas Regulatory Authority (OGRA) and the Oil Companies Advisory Council.

As per details, the new pricing method for petroleum products shall be made effective from the 1st of September 2020.

The letter states that:

Pakistan State Oil (PSO) has been removed as the import price benchmark for fixing the prices of petroleum products in Pakistan. The Arab Gulf Pellets will be the new benchmark for determining petroleum prices, while the average cost of petroleum will be determined through PSO and Arab Gulf Pellets.

The Ministry of Energy said:

Any fluctuation in the exchange rate within the next 15 days would be reflected in the new petroleum price. PSO would be signing a long-term agreement to purchase petrol, just as they did for diesel. The purpose of this long-term petrol deal is to obtain fuel at a cheaper rate.

What are your thoughts on this? Please share with us in the comment section below.

  • This decision can be traced back to Nawaz Sharif regime. Same decision of price fixation on fortnight basis was implemented by them also through Mr. Ishaq Dar. That augmented the suffering of people than and same will happen now. Actually Govts.are migrating their whole financial debt to masses. In efficient bureaucracy and interest effective special assistants to Prime ministers are labeling the same old wine in new bottles. They are presenting their decision in a wonderfuly wrapped packing of people interests. Although it is not possible that our Govts. Shift reasonable relief in price lowering of oil Vs. international market because their whole financial system based on it. However; for the sake of discussion,if we consider the lowering of petrol prices by Govt. Who will ensure the availability. We had experienced the incapability, inefficiency and criminal behaviour of our Govts and their officials in June 2020 crisis, when petrol & diesel was diminished from petrol pumps and no one was their to rescue people of Pakistan.Even now, the so called report to fix the responsibility is in gray waters.
    In my opinion this decision of Govt will further increased the suffering of people and new waves of Recession, price hikes and tight household living are inevitable.

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