ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has prepared proposals striping the federal government of its authority to fix petroleum product prices in the country, sources told Geo News on Friday.
The regulatory body, the sources say, has formulated two suggestions with the first one seeking the authority to decide fuel prices itself as a regulator. The second proposal provisions that the market will decide the prices itself which will be monitored by the government body.
The prices of petroleum products in the country are revised on a fortnightly basis where Ogra works out the rates by assessing various factors and forwards the summary to the Finance Division which then consults with the prime minister and notifies the official fuel prices.
The prices of petroleum products hold key significance as any change in them eventually has a trickle-down effect on the inflation-weary masses.
The government, earlier this month, increased the petrol and high-speed diesel prices by Rs9.99 and Rs6.18 per litre, respectively.
The prices, as per the statement issued by the Finance Division, were assessed on the basis of price variations in the international market by Ogra.
Following the price hike, petrol and diesel are being sold at Rs275.60 and Rs283.63 per litre, respectively.
Sources say that it is also possible that the oil marketing companies (OMCs) will be given the authority to decide fuel prices — a proposal on which the petroleum dealers have expressed their reservations.
However, there's a risk that empowering OMCs to fix prices might lead to a monopoly in the market, the sources warned.
The prospective change in policy comes in light of Prime Minister Shehbaz Sharif's directions to get rid of the responsibility of deciding fuel prices.
Stressing that all the criticism is on the government for the increase in the prices of petroleum products, sources have said that the government does not set the price of anything except petroleum prices.
Ogra's suggestions will be tabled in a high-level meeting, will be duly consulted with the Petroleum Division and subsequently will be approved by the prime minister.
The Petroleum Division is expected to reach a final decision on the said issue within one week.
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