ISLAMABAD: The National Assembly’s Standing Committee on Petroleum Division has called for greater transparency in fuel pricing and the petroleum levy, while reviewing government measures to mitigate the impact of rising international oil prices on domestic consumers.
The committee, chaired by Syed Mustafa Mehmood, was informed that surging shipping and insurance costs, longer transportation routes and exceptionally high refining margins had significantly increased the international cost of crude oil and petroleum products.
The petroleum minister told lawmakers that the government was taking steps to ensure uninterrupted fuel supplies while limiting the impact of rising global prices on consumers.
The Oil and Gas Regulatory Authority (OGRA) informed the committee that petrol and diesel prices were determined through a publicly available formula based on international market prices and Pakistan State Oil (PSO) data. The calculation incorporates a seven-day rolling average, the applicable exchange rate and other prescribed components.
The committee stressed the need to improve public awareness of the various elements contributing to retail fuel prices, including taxes, petroleum levies, transportation expenses and international price benchmarks.
Lawmakers Question Petroleum Levy
Members also questioned the role of the petroleum levy, observing that although it was initially intended to help cushion fluctuations in fuel prices, it had evolved into a regular source of government revenue.
Chairman Syed Mustafa Mehmood emphasised that lawmakers had the right to scrutinise the levy’s rationale and its impact on consumers, calling for greater clarity on how it contributed to the final price paid at the pump.
Four Refineries Sign Upgrade Agreements
On refinery modernisation, the petroleum minister informed the committee that four of Pakistan’s five refineries had signed agreements to upgrade their plants, while negotiations with the remaining refinery were ongoing.
The government is pursuing refinery upgrades to increase domestic production, improve processing capabilities and reduce dependence on imported refined petroleum products.
Lawmakers also expressed concern over the environmental impact of higher-sulphur petroleum products, particularly during the winter and smog season, highlighting the need to address associated air pollution risks.
Measures to Curb Petroleum Smuggling
The committee was briefed on efforts to combat petroleum smuggling, including tighter border controls and plans to digitise the fuel supply chain from end to end.
The proposed digital system aims to identify discrepancies between the quantities of petroleum products entering the supply chain and those ultimately sold, helping authorities detect illegal diversion and improve monitoring.
Committee Seeks Gas Sector Financial Details
On the gas sector, OGRA was directed to provide updated figures on the liabilities and revenue shortfalls of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), including a reconciliation of outstanding amounts.
The committee also ordered a detailed briefing on Universal Gas Distribution Company and its proposed commercial gas sales. The briefing will cover gas procurement, customer arrangements, pricing, transportation and the proposed use of SNGPL and SSGCL infrastructure.
Members further sought research into the possibility of supplying farmers with cheaper Light Diesel Oil (LDO), while ensuring safeguards against misuse, diversion and revenue leakage.
Rs1bn Allocated for Gas Schemes Near Wells
The committee was informed that Rs1 billion had been allocated for gas supply schemes located within a five-kilometre radius of oil and gas wells during the current financial year.
Under the proposed allocation, 70 per cent of the funds would go to SSGCL and the remaining 30 per cent to SNGPL.
Members called for a detailed account of the schemes’ implementation and fund utilisation at the committee’s next meeting.
The proceedings highlighted parliamentary concerns over fuel pricing transparency, refinery modernisation, petroleum smuggling, gas-sector liabilities and the effective use of public funds, with lawmakers seeking greater accountability across the petroleum and gas industries.
Story by Israr Khan
