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POL products: Fortnightly price revision opposed

ISLAMABAD, May 15: Rejecting the government’s decision to revert to fortnightly price revision mechanism for POL products, the owners of petrol filling stations said it would not only create shortage of the commodity but supply hassle as well.

Despite opposition from the Oil and Gas Regulatory Authority (Ogra), the Economic Coordination Committee (ECC) on Tuesday approved the fortnightly price adjustment summary sent by the petroleum ministry.

Some four years back the government had started revising petroleum prices on monthly basis.

The stakeholders expressed serious concern over the decision and said that it would only lead to disturbances.

“In case of monthly adjustment the most serious issue we face in the last week of the month is shortage in supplies….now this situation will arise after every 15 days,” said Chaudhri Zafar, Chairman All Pakistan Petroleum Dealers Association, North Zone.

At present, the consumers, fearing that the prices might go up, start buying more fuel in the last days of the month. Under this situation the filling stations run short of the product and their demands with the oil companies go up.

“But the companies do not entertain our demands whenever the prices are set to go up and if the pumps go dry, Ogra comes down hard on us for not selling fuel and trying to stock it for next month,” said Abid Hayat, another petrol pump owner in Islamabad. “On the other hand whenever the prices are set to decrease the oil companies pressurise us to buy more fuel.

The ECC decision comes in the wake of report filed by a committee headed by Syed Naved Qamar, Minister for Water and Power, and its members were petroleum minister and deputy chairman Planning Commission.

However, sources said that even Ogra was not in favour of fortnightly price adjustment on the grounds that it would create hassle in managing the decision.

“The system is not computerised and pumps would continue to sell the products at higher prices for two to three days if prices fall,” sources in Ogra said adding that it is not easy to monitor all the filling stations across the country.

The system of fortnightly pricing was introduced in 2002 by the Oil Companies Advisory Committee and it continued till 2007.

But in 2008 the monthly fuel pricing regime was implemented on the grounds that it was beneficial for the ordinary consumer.

However, the oil companies and the refineries are in favour of fortnightly pricing would help reduce circular debt.

“If the prices continue to rise, the inventory loss becomes too high to be maintained,” said Adil Khattak, CEO Attock Petroleum limited, “This is a logical decision and beneficial for all concerned.”  He said that if the fortnightly pricing regime remained in place the consumers would be benefiting from a decrease of 3 to 4 rupees per litre, based on the declining prices internationally.

Meanwhile, the petrol pump owners said the move would help government increase oil prices constantly but slowly and there will not be much public reaction over minor increases.

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