The Oil and Gas Regulatory Authority (OGRA) has responded to the oil industry’s concerns regarding the recent reduction in petrol and diesel prices, which came into effect on July 16, 2023. OGRA firmly rejected the industry’s claims, stating that they lacked evidence and contradicted the policy guidelines set by the federal government.
Pricing in Accordance with Approved Formula and ECC Decision
In a statement, OGRA emphasized that the prices of petrol and diesel had been calculated strictly according to the formula approved by the Economic Coordination Committee (ECC) of the Cabinet on July 28, 2020. As a result, a reduction of Rs. 9 per liter in petrol prices and Rs. 7 per liter in diesel prices had been implemented for the general public starting from July 16.
Incorporation of Previous Month’s Incidentals and Diesel Premium
Under the ECC decision, if PSO’s premium, freight, or incidentals from the previous fortnight are unavailable, the incidentals from the previous month will be considered. OGRA clarified that in line with this decision, the incidentals from the previous month had been included in the price calculation. Moreover, the diesel premium of $4.20 per bbl of PSO, valid from July 1 to December 31, 2023, and agreed upon by PSO and Kuwait Petroleum Company, had been taken into account since May 29, 2023, and factored into the prices.
Baseless Claims and Impact on the Oil Industry
OGRA stated that it had fully complied with the ECC decision, both in its content and intent. Therefore, the oil industry’s allegations concerning the pricing mechanism and supply disruptions were groundless and unacceptable, according to the OGRA statement.
Earlier, the Oil Companies Advisory Council (OCAC) expressed its dissatisfaction with OGRA’s pricing actions, claiming that the manipulation had resulted in an inventory loss of approximately Rs. 11 billion for the industry. The OCAC emphasized that such losses were unsustainable and would have a severe impact on an already struggling oil industry.
