Quarterly revision of oil prices: petroleum ministry rejects Ogra''s proposal

The Ministry of Petroleum and Natural Resources has rejected a proposal of the Oil and Gas Regulatory Authority (Ogra) to fix petroleum product prices after every three months instead of monthly basis. On March 29, Ogra sent a proposal to the Petroleum Ministry requesting it to review POL prices after every three months.
The authority in a letter written to the Petroleum Ministry argued that due to frequent fluctuations in oil prices at international market, local prices should be fixed on quarterly basis in a bid to provide relief to the common man. Rejecting the Ogra proposal, the ministry argued that reviewing the petroleum product prices after every three months is not possible. According to the Petroleum Ministry, the oil refineries have requested to review oil prices after every 15 days. On March 6, the Finance Ministry and Ogra have rejected a similar proposal of the Petroleum Ministry which wanted to review petroleum products'' prices after every 15 days.
It was Dr Asim Hussain, minister for petroleum and natural resources, who had decided to fix petroleum products'' prices in 2009 after every month instead of every 15 days. According to sources in Ogra, the Petroleum Ministry on February 13 dispatched a summary on a fortnightly specification of petroleum products'' prices to relevant departments.
On February 13, the Petroleum Ministry issued a circular arguing that petroleum products'' prices in the international markets are increasing with each passing day and keeping the trend in view, fixation of POL prices twice a month has become inevitable. The Petroleum Ministry was going to forward the summary to the Economic Co-ordination Committee (ECC) of the Cabinet but it could not succeed when the Finance Ministry and Ogra opposed the proposal.
The sources added that reviewing POL prices fortnightly may encourage hoarding of petroleum products which could create June 2011 like situation when a serious petrol shortage in the country compelled the government to import over 100,000 barrels of additional petrol. On the other hand, oil refineries are also pushing the Petroleum Ministry to review POL prices after every 15 days.