Fifth meeting of the Committee constituted by the Prime Minister to review the petroleum pricing mechanism was held today under the chairmanship of Federal Minister for Petroleum Ali Pervaiz Malik.
The sub-committees constituted by the main committee presented their findings and recommendations on various aspects of the petroleum pricing mechanism. KPMG also presented its report comparing petroleum pricing and taxation structures in the region.
Members of the Committee appreciated the daily pricing formula and the steps taken to enhance transparency as well as reduce volatility in the new petroleum pricing mechanism.
The Minister emphasized that deregulation of the petroleum sector should be undertaken through a clear and measurable roadmap, with specific benchmarks and milestones identified to assess progress towards the intended objectives.
The Committee was briefed that the dashboard on the Oil and Gas Regulatory Authority (OGRA) website is now operational and provides information on daily petroleum product prices, the applicable pricing formula and relevant Platts data, enhancing transparency and public access to pricing information.
The meeting also reviewed the potential impact of strategic petroleum reserves and a proposed price stabilization fund on the pricing mechanism, including their role in mitigating market volatility and ensuring stability of petroleum supplies and prices.
The Minister said that Oil Marketing Companies (OMCs) should be made responsible for ensuring end-to-end digitization of the petroleum supply chain to improve transparency, traceability, efficiency and accountability across the system.
The meeting further deliberated on the moratorium on the establishment of new OMCs and its implications for competition, investment and market structure. It was resolved that IFEM pool also needs a wholesome review.
The issue of windfall tax was also discussed. It was decided that the Finance Division, in consultation with the Federal Board of Revenue (FBR) and Petroleum Division, would present a report to the Committee on the matter in next meeting.
It was decided that the Committee will continue to deliberate on the recommendations of the sub-committees and formulate a comprehensive roadmap for reforms in the petroleum sector with a view to promote transparency, competition, efficiency and consumer protection.
The meeting was attended by National Coordinator NCMC, Lt General Zafar Iqbal, Minister of state for Finance Bilal Azhar Kiyani and other members of the committee.
