The petroleum ministry has opposed senate panel's formula to determine oil prices on daily basis, terming it impracticable and unfeasible. The ministry counted two reasons in support of its case: non-existence of an effective regulatory mechanism and lack of proper information system to pass on change in prices to consumers on daily basis. In its report, the ministry said the panel did not consider all aspects of the issue before mulling the new formula. An official of the ministry said, "We believe that the proposed pricing formula to determine oil prices on day-to-day basis would create uncertainty in the society."
The panel had recommended basic changes in oil pricing system and proposed the new mechanism on daily basis. The panel was of the view that quick review of prices would help pass on effects of international prices to consumers.
On the contrary, the ministry wants continuation of the existing formula. It said fortnightly review was the best mechanism for a country like Pakistan where flow of information was not as quick as in countries, which have the proposed pricing system.
Pakistan is following deregulated regime for oil pricing and under the new system powers of fixing rates rest with the committee of oil marketing companies (OMCs).
OMCs review oil prices on fortnightly basis. Some circles are even critical to OMCs oil pricing system.
The ministry said though the Oil and Gas Regulatory Authority (Ogra) was in place to regulate the sector but it was not so efficient to check change in oil prices on day-to-day basis.
Sources said the ministry would oppose the panel at every forum including the parliament to keep the exiting mechanism working.