ISLAMABAD: Federal Minister for Petroleum Ali Pervaiz Malik said on Tuesday that petroleum prices were determined under a transparent formula based on a seven-day average.
Responding to a calling attention notice regarding the daily determination of petroleum prices instead of the previous fortnightly mechanism, the minister said the Oil and Gas Regulatory Authority (OGRA) calculated prices based on the seven-day average. He added that the authority had also published the formula on its website.
Referring to the history of petroleum price revisions, Ali Pervaiz Malik said prices had previously been revised annually, before the practice shifted to monthly and later fortnightly adjustments.
He said Pakistan imported all its oil requirements, while volatility in international markets made it necessary for the government to ensure an uninterrupted supply chain and prevent profiteering and hoarding.
The minister said keeping domestic petroleum prices aligned with international market rates helped reflect global price fluctuations in the local market. The approach also helped maintain supply chain security, he added.
He said international oil price trends generally became clearer after three to four days, indicating whether prices were moving upwards or downwards. The existing pricing mechanism had helped improve fuel availability at petrol pumps and reduce difficulties faced by consumers, he added.
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Ali Pervaiz Malik said the government had introduced the seven-day average mechanism to address supply-related issues and ensure the availability of petroleum products across the country.
The minister also informed the House that, at the prime minister’s request, refineries had once again reduced their gross refining margins. He said a cap of $38 had been imposed on the crack margin.
He added that the measure had resulted in a reduction of Rs7.69 per litre in the price of high-speed diesel the previous day, while petrol prices had also recorded a considerable decrease.