The federal government is all set to deregulate the price of high-speed diesel (HSD), and Minister for Petroleum Shahid Khaqqan Abbasi has directed director general Oil to draft a summary for the Economic Coordination Committee (ECC).
Official sources at petroleum ministry on condition of anonymity disclosed to Pakistan Today that incumbent government has decided to deregulate HSD price in the name of creating competition in the market among oil marketing companies (OMCs) and dealers. They said deregulation of diesel (HSD) price is likely in the near future after the approval of ECC. DG Oil will suggest deregulation of OMCs and dealers margin already fixed in the price of each litre of diesel.
“Margin of OMCs and dealers will be deregulated after the approval of the ECC, as a result existing mechanism of keeping oil prices at same level in all parts of the country will met an end,” sources said.
At present, the margin of OMCs in diesel price stands at Rs 2.40 per litre and dealers margin is at Rs 2.60/litre to keep the diesel price at same level. However, if the ECC gives its approval to the summary seeking deregulation of diesel price then the mechanism of keeping diesel price at same level in all parts of the country will meet an end, as OMCs and dealers will be authorised to set their margin.
Also, OMCs and dealers will be free to charge the consumers of diesel on their will, besides a sudden increase of Rs 2-4/litre in the price of diesel.
Last year, the government deregulated the price of high octane blended component (HOBC) which resulted in OMCs increasing the price of HOBC by Rs 8 to 10/litre. This was an abnormal hike but Oil and Gas Regulatory Authority (OGRA) failed to maintain/fix reasonable price of the oil (HOBC) and so far it could not take any mentionable action against the illegal hike by the OMCs.
Similarly, the government deregulated the price of Liquefied Petroleum Gas (LPG) in the past. But, so far the OGRA has failed to stop the LPG marketing companies, distributors, dealers etc from over charging. The companies, distributors and dealers have earned high profits during the period LPG prices remained deregulated in the country.
It is pertinent to mention here that there will be a flood of inflation, increase in transport charges, and hike in the prices of food and daily use items with the approval of ECC. Similarly, OMCs and dealers will be authorised to charge the consumers as they wish, while local (district) administration will not be able to stop or punish the petrol pumps or OMCs and dealers.
Usually, whenever there is a complaint of over-charging, tehsil and district administration takes action against the over-charging or artificial hike in oil prices. But, with the approval of ECC, neither OGRA nor tehsil and district administration will be able to stop the OMCs and dealers from over charging of the consumers.
