The federal government has indicated that it will limit its role in determining the prices of petroleum products and bring them in line with market principles.
According to Petroleum Minister Ali Pervez Malik, after the approval of the refinery upgrade policy, the process of manufacturing modern refinery systems and Euro-five standard fuel will begin in the country.
Speaking at a meeting of the National Assembly Standing Committee on Petroleum, the Petroleum Minister said that the refinery upgrade policy has been sent to the cabinet for approval, which is expected to receive approval from the Economic Coordination Committee (ECC) by July 15.
He said that after the approval of the policy, the long-pending process of modernizing refineries will begin, which will result in the production of Euro-five standard fuel in Pakistan.
Ali Pervaiz Malik said that the government will not pass on the burden of the current shortcomings or inefficient performance of refineries to the consumers and the public will be protected from additional financial pressure.
The Petroleum Minister said that Pakistan has been announcing the prices of petroleum products transparently for the last 2 decades, however, now efforts are being made to bring the pricing system in line with the principles of a free market in a phased manner.
He said that the committee formed by Prime Minister Shehbaz Sharif has so far held 3 meetings to review reforms in the petroleum pricing system, which also includes a proposal to display prices on a daily basis.
According to the Petroleum Minister, global crude oil prices have returned to pre-war levels, but fuel prices are still high due to Pakistan’s heavy reliance on imported refined petroleum products.
He said that Pakistan imports about 33 percent of its diesel requirements and about 70 percent of its petrol consumption. During the recent global crisis, premiums, insurance and shipping costs increased significantly, which impacted the prices of petroleum products.
Ali Pervaiz Malik said that the rates of petroleum levy and carbon levy are currently lower than the levels fixed on February 27, however, fuel prices have not returned to their previous levels due to the high cost of imported refined products.
On the other hand, the standing committee expressed concern over the unused corporate social responsibility (CSR) funds of billions of rupees of petroleum companies in Sindh and Balochistan.
The meeting was chaired by Syed Mustafa Mahmood. Provincial officials told the committee that Sindh started receiving CSR funds from petroleum companies from 2020-21, however, due to the lack of clear rules and regulations, they could not be fully utilized.
The officials said that CSR funds worth about Rs 3 billion in Balochistan could not be utilized due to force majeure (extraordinary circumstances) issues.
The committee raised questions about the government spending CSR funds on the services of consultants and international arbitration cases and sought details from the Directorate General Petroleum Concessions.
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