Refineries to absorb Rs15bn monthly burden to avert petrol price hike: minister

Pakistan’s oil refineries will bear an estimated Rs15 billion monthly burden to help the government prevent a Rs15 per litre increase in petrol prices amid rising international oil prices, Petroleum Minister Ali Pervaiz Malik said on Monday.

Addressing a press conference alongside Information Minister Attaullah Tarar in Islamabad, Malik said Prime Minister Shehbaz Sharif had consulted oil refineries on possible measures to shield consumers from the impact of rising global fuel prices.

“I am grateful to all the refineries that saw the public is in difficulty and with the government’s help … increased their throughput,” he said, adding that the refineries had benefited from higher throughput over the past three months.

The minister said the refineries were requested to support consumers during the difficult period and had agreed to help avert a Rs15 per litre increase in petrol prices that was due to take effect on Friday.

“As a result of this step, a load of approximately Rs15 billion a month would be borne by these refineries,” Malik said, adding that the arrangement would allow petrol to be sold Rs15 per litre cheaper than its price in the international market.

He said the government would continue to intervene to protect consumers if the situation became more difficult, while expressing hope that the Middle East crisis would move towards a peaceful resolution.

Malik said the government remained committed to deregulation and refinery upgrades but stressed that public relief was its immediate priority amid the prevailing crisis.

“The government doesn’t want to be cruel to anyone,” he said, adding that decisions would be taken through consultation, fairness and with public interests in mind.

He also said the refinery premium, which stood at $5 per barrel before the crisis, had been capped at $20 per barrel.

Meanwhile, Information Minister Tarar said Prime Minister Shehbaz had directed refineries to absorb the increase in international prices to prevent a domestic petrol price hike.

He said more than 15 million unique users had registered for the government’s fuel relief scheme, with around Rs27 billion allocated so far.

Tarar added that Pakistan’s macroeconomic indicators had remained largely stable despite the impact of the Middle East situation on economies worldwide.

The two ministers also ruled out any fuel shortage, saying domestic requirements were being met despite the difficult market conditions.

Malik said the country’s fuel supply requirements for November had been fully covered, while decisions regarding supplies for December and January would be taken in due course. The prime minister had directed relevant authorities to take all necessary steps to ensure uninterrupted supplies during the winter months.

The government has also reintroduced austerity measures in response to rising fuel prices, including requiring markets to close by 9pm and reducing fuel allocations for official vehicles by 50% for three months.