The finance ministry and Oil and Gas Regulatory Authority (Ogra) are reportedly resisting fixing prices of petroleum products on a fortnightly basis, saying that the existing formula of monthly fixation of prices, agreed upon after hectic deliberations, is more appropriate, well-informed sources told Business Recorder on Thursday.
Recently, the petroleum ministry had proposed to the Economic Co-ordination Committee (ECC) of the Cabinet to allow Ogra to notify prices on a fortnightly instead of monthly basis, after massive public outcry over an increase of Rs 8.02 to Rs 105.08 per litre in petrol prices. In response, the government revised prices down by Rs 2.32 only - to Rs 103.36 per litre. According to the notification, price of kerosene oil was reduced by Rs 1.74 and high speed diesel by Rs 1.16 a litre.
The domestic prices of petroleum products are linked with international (Arab Gulf) market prices of petroleum products and are notified on a monthly basis as per existing pricing mechanism duly approved by the ECC. According to the petroleum ministry, oil prices in international market have shown a consistent increasing trend over the past year because of which the quantum of increase accumulated during the month becomes substantial under the existing monthly price adjustment system.
"In order to reduce the monthly accumulated higher pricing burden on consumer, Petroleum Ministry has proposed that the domestic sale prices of petroleum products may be adjusted and notified on fortnightly basis," the sources said. The finance ministry has reportedly not supported the proposal and maintains that current system may continue.
Ogra has also not supported the proposal arguing that it will encourage hoarding of petroleum products, resulting in artificial shortages twice a month, thereby adversely impacting the public at large. Minister for Petroleum Dr Asim Hussain said that petroleum prices would be reviewed after every 15 days for which a summary had been sent to the ECC. Dr Asim Hussain said prices of petroleum products would be completely deregulated.