The recent decline in petroleum prices has sparked tensions between Pakistan’s oil industry and the government, with industry stakeholders questioning the accuracy of the pricing mechanism used by OGRA.
The industry claims the pricing mechanism resulted in an excessive reduction of around Rs46 per liter in High-Speed Diesel (HSD) prices and Rs11 per liter in petrol prices.
The sector has reportedly suffered losses of nearly Rs104 billion ($367 million) after the government announced a sharp cut in fuel prices last week.
On June 19, petrol prices were reduced by Rs74 ($0.27) per liter, while high-speed diesel prices were lowered by Rs67 ($0.24) per liter. The government also shifted from fortnightly to weekly price reviews to ensure consumers benefit faster from changes in global oil markets.
Industry stakeholders said OGRA failed to fully account for actual premium costs and relevant Platts pricing averages.
They estimated that differences in pricing calculations, premiums, and duties caused a financial impact of about $26.28 per barrel for diesel and $6.29 per barrel for petrol.
The controversy has raised concerns among local and foreign investors, with oil industry leaders urging the government to review the pricing mechanism and ensure consistency.
