Crude oil cheaper in the global market; government clarifies stance on petrol prices

Federal Minister for Petroleum Ali Pervaiz Malik has said that although crude oil prices in the global market have decreased significantly in recent months, it is not possible to provide relief at the local level immediately in the same proportion due to the import costs faced by Pakistan. He said that the government is committed to the policy of passing on the benefit of every real reduction in global prices to the public.

Talking to the media outside the Parliament House, the federal minister explained that Pakistan depends on a large amount of imported oil to meet its energy needs. According to him, about 70 to 80 per cent of the country’s needs are purchased from abroad, due to which the effects of fluctuations in the global market are directly reflected on local prices.

Ali Pervaiz Malik said that although the prices of crude oil in the international market have reached close to the pre-war level, the petrol imported to Pakistan is still costing about $15 to $20 per barrel more than in the past. According to him, this is the reason why the government has also kept the rate of petroleum levy relatively limited to keep the additional burden on the people low.

The Federal Minister said that when prices in the global market had significantly decreased in the past, the Prime Minister took a quick decision and approved a reduction in the price of petrol by about Rs 70 to 80 per litre so that its direct benefit reaches the consumers. He said that the government will follow the same principle in the future as well, and as soon as there is a clear reduction in the cost of imports, its effect will also be visible in the local prices.

He also shed light on the pricing mechanism of petroleum products and said that OGRA reviews international prices, import costs, insurance, freight charges and other relevant factors, including Pakistan State Oil (PSO), every week and formulates new price recommendations. According to him, this transparent system has been in place for the last two decades, and prices are revised on this basis.

Ali Pervaiz Malik further said that on the instructions of the prime minister, the government provided financial assistance of about Rs 130 billion for the provision of cheap fuel, which was aimed at protecting motorcycle users, public transport and ordinary citizens from inflationary pressures to the extent possible.

The Federal Minister reiterated that the government is constantly monitoring the global market situation, and if there is a further reduction in import costs, efforts will be made to pass on its benefits to the public without unnecessary delay. He said that stability in the energy sector and transparency in prices are among the priorities of the government.