ISLAMABAD: Oil Companies Advisory Council (OCAC) has asked the government to take industry on board on deregulation of petroleum prices.
In a letter to Secretary Petroleum, Chairman OCAC has cited reference of letter of November 19, 2024, through which the industry requested inclusion of major
private sector stake holders in the working group established to develop roadmap on future strategy of
deregulation of downstream oil sector in Pakistan.” We understand that the Government is in the process of formulating a policy for the deregulation of petroleum
product prices in near future. However, it is concerning to note that private-sector refineries and oil marketing companies (OMCs), which play a pivotal role in the downstream oil industry, have not yet been included in the consultation process.
He further stated that It is critical to highlight that the industry is already facing existential challenges due to exemption of sales tax issue on petroleum products, smuggling of petroleum products, delay in revision of OMC margins, and other challenges that have been highlighted time and again. OCAC has strongly urged OGRA to involve private sector refineries and OMCs in the consultation process to ensure the development of a balanced and workable deregulation policy for the country. Any unilateral decision on such at critical matter in haste will have severe ramifications for the oil industry and could intensify the existing
challenges faced by it. We look forward to your kind support on this matter of grave importance for the industry,” Adil Khattak added.
Adil Khattak in his comments has stated that the industry had earlier also requested that the private sector major stakeholders should be included in consultation for deregulation/ revision of pricing mechanism of petroleum products but it went unheeded. The refineries and OMCs are already faced with existential crisis due to unwarranted exemption of petroleum products from Sales Tax in the Finance Act 2024-25 making not only normal operations unsustainable but also jeopardizing implementation of the Brownfield Refining Upgradation Policy. While the sales tax issue still remains unresolved in spite of numerous meetings and directives of Prime Minister and SIFC, taking up revision of petroleum products’ pricing mechanism at this stage is not only ill timed but non-inclusion of private sector stakeholders in consultation can lead to complications as we have witnessed in formulation and implementation of the Brownfield Refineries Policy over last five years. While the Prime Minister and Finance Minister are repeatedly stressing inclusion of private sector in consultation the mandarins in the Petroleum Division apparently think otherwise or may be they feel more comfortable working with public sector companies only. On behalf of Oil Companies Advisory Council, I would like to assure them of our fullest cooperation in the best national interests.
