The All Pakistan Petroleum Dealers Association (APPDA) has threatened a nationwide strike over the government’s plan to deregulate oil prices without consulting key stakeholders. Following an executive committee meeting, the association warned that the move would grant foreign companies a monopoly over Pakistan’s oil market, jeopardising energy security and causing severe economic repercussions.
The deregulation plan, spearheaded by the petroleum division and the Oil and Gas Regulatory Authority (OGRA), has raised concerns about its impact on local refineries and petroleum dealers. APPDA spokesperson Hassan Shah said the decision could disrupt the entire supply chain, forcing domestic refineries to shut down as they lack the financial resources to compete with multinational corporations.
Shah argued that deregulating high-octane blending components (HOBC) and lubricants had already created an oligopoly without benefiting consumers. He warned that a similar approach for oil prices would lead to unchecked price increases, inflation, and currency depreciation. He also criticized Pakistan’s limited oil storage capacity, which, at just 15 days’ worth of supply, is insufficient for a fully deregulated market.
The APPDA urged the government to reconsider the proposal, emphasizing that fuel is critical to national security and requires careful oversight. Shah called on the Ministry of Defence to assess the strategic risks and for the State Bank to evaluate the economic impact. He said policymakers should not compromise energy security for corporate interests.
Pakistan’s fuel market is highly sensitive, with frequent shortages, particularly in smaller cities. Unlike Western countries that maintain months’ worth of fuel reserves before transitioning to a deregulated system, Pakistan lacks the infrastructure for such a shift. The association warned that leaving oil prices entirely to market forces could result in financial instability, directly impacting businesses and consumers.
