KARACHI: Pakistan's plans to deregulate fuel prices could lead refiners to halt planned upgrades worth up to $6 billion and force some refineries to close, some of the country's top refiners said in a letter to the country's oil regulator.

Looking to drive down prices for consumers, the South Asian nation's Oil & Gas Regulatory Authority (OGRA) has proposed that oil marketers and refineries be allowed to set fuel prices, instead of the government setting prices.

As part of the change, OGRA proposed scrapping or reviewing a rule that requires fuel buyers to purchase supply from local refineries, another issue the refiners said could result in "disastrous consequences".

PRL all set to sign supplemental agreement with Ogra

The refiners -- state-run Pakistan Refinery and private domestic refiners Pak Arab Refinery, Attock Refinery, Cnergyico, and National Refinery -- said they were already struggling to operate near full capacity, and asked that they be consulted before the implementation of "irrational recommendations".

"The refining sector requires OGRA support through pragmatic and supportive measures, rather than suggesting ways that if implemented would result in their permanent closure," the refiners told OGRA on Monday in a letter, which was reviewed by Reuters.

The deregulation was aimed at boosting competition and protecting the public interest, OGRA told Reuters in a statement on Tuesday but did not respond to specific questions on the letter from the refiners.

Ogra gas tariff hike notification lawful: SHC

However, it said in an April 17 presentation reviewed by Reuters the potential impact of deregulation on refinery upgrades had to be assessed carefully, calling it a challenge.

"The refineries upgradation will bring in investment of $5 - 6 billion and not only result in cleaner environment friendly fuels but also result in savings of precious foreign exchange of the country," the refiners wrote in the letter to OGRA.

Comments

200 characters
Ch K A Nye Apr 23, 2024 02:55pm
There is far too much money be made by ALL participants in the smuggling racket for it to be stopped.
thumb_up Recommended (0) reply Reply
WAQAR AKRAM Apr 23, 2024 03:42pm
Its all about Business
thumb_up Recommended (0) reply Reply
Freeky Nouman Apr 23, 2024 05:34pm
@Ch K A Nye , Agreed they want ogra not deregularise but they want smuggled oil from from Iran...
thumb_up Recommended (0) reply Reply
ammar iqbal Apr 23, 2024 07:58pm
I think OGRA should be asked as to how deregulation will bring down the prices ?. The prices are already partially deregulated. Taxes and levy are already stipulated.
thumb_up Recommended (0) reply Reply
ammar iqbal Apr 23, 2024 07:59pm
The only element left is the cost of product which is linked to international plats price.
thumb_up Recommended (0) reply Reply
ammar iqbal Apr 23, 2024 08:01pm
Instead of Closing the smuggling channel we are just deregulate the price and the smuggling will stop.. But how ?
thumb_up Recommended (0) reply Reply
ammar iqbal Apr 23, 2024 08:02pm
Tyres , tea , tiles ,cooking oil etc etc which are all deregulated are all flooded with smuggled goods.. so how prices will come through deregulation ?
thumb_up Recommended (0) reply Reply
Kgalid Apr 24, 2024 09:11am
.considering very rugged terrain ,fear of enforcement agencies,old absolute vehicles and day light operations, I do not think that it amounts to even 10%/ of our daily national fuel consumption .
thumb_up Recommended (0) reply Reply
Asif Khan Apr 27, 2024 06:23pm
Yes, you are right. It comes to about 5 per cent of our daily consumption.
thumb_up Recommended (0) reply Reply