All Pakistan Petroleum Dealers Association (APPDA) has rejected the government decision to fix petroleum product prices on a fortnightly basis, saying that it would create serious problems for consumers and dealers. "We have requested the government to implement a policy of quarterly review of petroleum products, but the Petroleum Ministry, refineries and oil marketing companies opposed the idea," he said.
The government's decision to fix prices fortnightly will benefit oil marketing companies i.e like Pakistan State Oil, Shell and those owned by refineries. This move will allow them to create artificial shortage with negative consequences for the general public, said APPDA Chairman, Abdul Sami Khan.
Talking to Business Recorder on Saturday, Khan said that Oil and Gas Regulatory Authority (OGRA) as well as the Ministry of Finance had not supported the proposal as it would encourage hoarding resulting in artificial shortages. When asked why petrol pump owners are against the fixation of oil prices on fortnightly basis, he said that fixation of oil prices twice a month would provide opportunities to oil marketing companies to hoard products and create artificial shortage. This decision might encourage hoarding of petroleum products which could create June 2011 like situation when a serious petrol shortage in the country compelled the government to import over 100,000 barrels of additional petrol, he added.
According to the Petroleum Ministry, oil prices in international market have increased over the past year because of which the quantum of increase accumulated over one month becomes substantial under the existing monthly price adjustment system. "In order to stagger the monthly accumulated higher pricing burden on consumer, the Petroleum Ministry has proposed that the domestic sale price of petroleum products may be adjusted and notified on fortnightly basis," the sources said.
On March 29th, Ogra in a written letter to the Petroleum Ministry suggested POL prices should be reviewed after every three months. The authority argued that due to frequent fluctuation in oil prices in the international market, local prices should be fixed on quarterly basis in a bid to provide relief to the common people.