Pakistan Moves Towards Phased Deregulation of Petroleum Sector

Islamabad (Finance Reporter): The government has moved closer towards phased deregulation of the petroleum sector as the committee formed by the Prime Minister to review the petroleum pricing mechanism held its fifth meeting under the chairmanship of Federal Minister for Petroleum Ali Pervaiz Malik.

During the meeting, sub-committees presented their findings and recommendations on different aspects of the petroleum pricing system, while KPMG shared a comparative report on petroleum pricing and taxation structures in the region.

Committee members appreciated the introduction of a daily pricing formula and other measures aimed at improving transparency and reducing volatility in the petroleum pricing mechanism.

Federal Minister Ali Pervaiz Malik stressed that deregulation of the petroleum sector must follow a clear and measurable roadmap with defined targets, benchmarks and milestones to monitor progress.

The committee was informed that the Oil and Gas Regulatory Authority (OGRA) dashboard has become operational, providing public access to daily petroleum prices, pricing formulas and relevant Platts data to enhance transparency.

The meeting also examined the role of strategic petroleum reserves and a proposed price stabilization fund in controlling market fluctuations and ensuring steady fuel supplies.

The minister directed that Oil Marketing Companies (OMCs) should ensure complete digitization of the petroleum supply chain to improve efficiency, accountability, tracking and transparency across the sector.

The committee also discussed the impact of the moratorium on establishing new OMCs, along with issues related to competition, investment and market structure. It was agreed that the IFEM pool requires a comprehensive review.

The matter of windfall tax was also reviewed, with the Finance Division, in consultation with the Federal Board of Revenue (FBR) and Petroleum Division, tasked to submit a report in the next meeting.

The committee will continue reviewing recommendations and work on a comprehensive reform roadmap aimed at promoting transparency, competition, efficiency and consumer protection in Pakistan’s petroleum sector.

The meeting was attended by National Coordinator NCMC Lt General Zafar Iqbal, Minister of State for Finance Bilal Azhar Kiyani, and other committee members.