Ministry of Petroleum (MoP) has sought approval from Cabinet to empower Oil and Gas Regulatory Authority (Ogra) to monitor prices of regulated as well as de-regulated petroleum products, Business Recorder has learnt. In existing mechanism, Ogra is empowered to monitor only regulated products. "Petroleum Ministry has moved a summary to Cabinet to empower Ogra for monitoring prices of regulated as well as de-regulated petroleum products," sources maintained.
Petroleum Ministry is seeking approval after Economic Co-ordination Committee (ECC) of the cabinet in its meeting held on October 16, 2010 approved, in principle, de-regulation of oil prices and Inland Freight Equalisation Margin (IFEM). Official said that after approval of new oil pricing formula by ECC, cabinet division would seek ratification of decision from federal cabinet before its implementation in its upcoming meeting chaired by Prime Minister Syed Yousuf Raza Gilani.
ECC has fixed margins of Oil Marketing Companies (OMCs) and dealers. In fixed margins' regime, OMCs and dealers margins will be slashed from existing Rs 1.75 per liter to Rs 1.50 per liter and Rs 2.17 per liter to Rs 1.87 per liter on petrol respectively. The margin of OMCs on HOBC will decline from existing Rs 1.98 per liter to Rs 1.72 per liter and dealers margin from existing Rs 2.48 per liter to Rs 2.15 per liter.
"IFEM will fall in controlled-deregulation because Ogra will notify it from one destination to other destination but so far as prices of petroleum products are concerned, refineries and OMCs will determine the prices on monthly basis whereas Ogra will monitor it," an official said. Imported price will be benchmark for prices and refineries as well as OMCs will not be allowed to charge over set 'bench mark price' to protect consumers' interests. The official said that oil industry would face either fine or imprisonment because Pakistan Petroleum Rules had provision to impose Rs 0.3 million or 3-year imprisonment in case of violation.