By Adnan Rafique
ISLAMABAD: Federal Minister for Petroleum Ali Pervez Malik said on Wednesday that diesel prices were likely to fall by more than Rs30 per litre after local refineries agreed to cut their prices to provide relief to consumers amid the ongoing global crisis.
Addressing a press conference along with Federal Minister for Information and Broadcasting Attaullah Tarar, he said the Oil and Gas Regulatory Authority (OGRA) would complete its calculations before announcing the revised price.
Ali said the government was fully aware of the difficulties being faced by people because of the war and was making every possible effort to reduce their burden. He said Prime Minister Shehbaz Sharif had directed the government to provide relief to the people and several measures had been taken in this regard. “Despite being under the IMF programme, the government has utilised more than Rs100 billion to protect the people from the impact of these difficulties,” he said.
The minister said the government had also consulted provincial governments and introduced targeted subsidies for affected segments. He said the government had used whatever temporary fiscal space was available in the taxation system after consultations with the IMF.
He said the escalation of the war had caused a sharp increase in international prices of refined petroleum products. “The crack margin for diesel has once again reached $60 to $70,” he said. He said the war in Russia had also created problems for diesel supplies despite the country being an oil-producing state.
Several other countries were facing similar difficulties, he added.
The minister said a major portion of diesel consumed in Pakistan was produced locally by refineries, which processed crude oil into refined products and supplied them to oil marketing companies. He said Prime Minister Shehbaz Sharif had personally requested the refineries to provide relief to consumers and directed the petroleum ministry to pursue the matter.
“After understanding the difficulties being faced by the people, the refineries have accepted the government’s request,” he said. He said the refineries had agreed to a significant reduction in diesel prices.
The minister said the reduction would provide relief to farmers using tractors and tube-wells. It would also benefit students travelling by buses. He thanked the refineries for their cooperation, saying they had also supported the government earlier during the war by agreeing to base their prices on crude oil for one month.
The minister said the government would ensure that the full benefit of the refineries’ decision was passed on to consumers. He said the government would balance the need for cheaper fuel and lower taxes with the legitimate requirements of stakeholders in the oil supply chain. The minister said he would visit refineries in Karachi next week along with his team on the prime minister’s instructions.
The purpose of the visit would be to thank the refineries for their cooperation and discuss long-pending issues, particularly the upgradation of refineries, he added. Ali said some local refineries could not process heavy crude oil, increasing the need to import more expensive crude.
“This limitation ultimately contributed to higher diesel and petrol prices for consumers,” he said. He said the government would prepare a plan for refinery upgradation and address structural weaknesses in the refining sector. The minister said the government would also operationalise bonded schemes to enable Pakistan to secure and store crude oil from friendly countries according to its requirements.
He said these measures would help reduce Pakistan’s energy vulnerabilities and ensure energy security for future generations.
