KARACHI, Dec 17: The World Bank has suggested Pakistan to set price caps for petroleum products specially motor gasoline and diesel as an interim measure to ensure that maximum prices should not go beyond these limits.

This advice came a senior PSD specialist World Bank, Waqar Haider at a “Oil and Gas Disseminating Workshop”, organized by Oil Companies Advisory Committee (OCAC) and the World Bank here on Wednesday.

This mechanism can be abolished when sufficient competition is established among oil marketing companies, he added.

Haider was of the view that prices set up by OCAC on approved formula gives appearance of collusion and cartel.

He further suggested that import parity prices should be fully transparent and tariff protection, if any, should be made transparent.

However, he maintained that price fixing was the prerogative of Pakistan government.

Haider said that the World Bank was working with the government for the rationalization of taxation on petroleum products.

“This is a classic case of price distortion for taxation purposes. Some progress has been made in this regard. It will take a longer time to rationalize this as such a situation is an outcome of several decades,” he observed.

However, Haider said that Pakistan was leading in South Asia in its oil and gas sector reforms, well ahead of India, Bangladesh, Sri Lanka and Nepal.

He underlined the need for maintaining balance between the prices of motor gasoline and diesel.

He was of the opinion that lower price of diesel has created its shortage in the country as consumers were converting their vehicles from petrol to diesel.

Principal energy consultant, World Bank, Marc L Heitner pointed out that only 18 per cent of the household had access to natural gas while 40 per cent using bio-mass which has a lower or some time negligible prices.

He said that oil marketing companies had to address price fixing mechanism as it was creating a lot of misgivings.

The chairman of the opening session and managing director, PARCO, Dr Shahid K Hak in his remarks underlined the need for maintaining transparency and judiciousness in pricing and supply of oil and gas products.

He also advocated the point of view that refining petroleum products and domestic gas production has generated a tremendous economic activities in the country both in term of job creation and revenue generation.

Hak suggested the World Bank to question the transparency of load despatch programme of Wapda as in his views, this policy encouraged inefficient power plants and discouraged efficient power plants.

He also suggested effective participation of private sector in Oil and Gas Regulatory Authority (OGRA).—APP