Petroleum prices to be revised on fortnightly basis

ISLAMABAD: Economic Coordination Committee (ECC) of the federal cabinet has approved a proposal by the Ministry of Energy for revision of prices of petroleum products on a fortnightly instead of the existing monthly basis.

The ECC chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh also approved a proposal by the Ministry of Industries and Production for import of up to 300,000 tonnes of refined white sugar to maintain buffer stocks and prevent any shortage of sugar in the coming months before the start of next crushing season.

The ECC decided to adopt a revised pricing methodology for gasoline and high-speed diesel on a fortnightly basis, in view of its advantages for ensuring fair competition, alignment of margins with international pricing trends, and smoothing out of volatility and distortions because of purchasing dates of oil companies.

The revision of oil prices on a fortnightly basis, coming into effect from 1st August would also allow planning for three months ahead with refineries and Oil Marketing Companies (OMC), improved inventory management and sales reporting, enforcement of stock requirements, transparency and visibility of prices, and reduced dependence on one company.

As per the existing system, the prices of petroleum products are determined by allowing refineries to fix and announce the ex-refinery sale prices on a monthly basis subject to the condition that the price of petroleum products cannot be more than the Pakistan State Oil (PSO) average actual landed import price of previous months.

The ECC also considered a proposal by the Ministry of Industries and Production for import of refined sugar by the Trading Corporation of Pakistan (TCP) to maintain buffer stocks and allowed import of up to 300,000 metric tonnes of white sugar.

The mode of procurement and other modalities to be decided by a three-member committee comprising Secretary Industries and Production, Secretary Commerce and Secretary Finance. The ECC asked the committee to seek input from the Law Division on the preferred mode of procurement and report in its next meeting.