The federal government is considering daily fuel prices under a system that would let the Oil and Gas Regulatory Authority set revised rates each night.
Under the proposal, Ogra would determine the prices of petrol, high-speed diesel, light diesel oil and kerosene. New rates would take effect at midnight.
The new system would replace weekly revisions and end the existing process of sending pricing summaries to the Petroleum Division, Finance Division and the prime minister for approval.
Prime Minister Shehbaz Sharif earlier formed a committee to review alternative petroleum pricing mechanisms. Petroleum Minister Ali Pervaiz Malik chaired the fourth meeting on July 13.
According to ministry sources, KPMG presented monthly, fortnightly, weekly and daily pricing options to the committee. The committee members preferred daily revisions.
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The proposed arrangement would use a hybrid model rather than complete deregulation. Oil marketing companies would set the Inland Freight Equalisation Margin, company margins and dealers’ commissions.
Ogra would continue monitoring fuel stocks, storage requirements and possible hoarding. The regulator would also supervise compliance by oil marketing companies.
The committee is also considering a stabilisation fund to reduce the impact of sharp international price movements. Savings generated when global prices fall could be deposited into the fund and used during future increases.
One example presented in the proposal used a retail price band of Rs275 to Rs325 per litre. Savings below Rs275 could enter the fund, while accumulated resources could support prices above Rs325 during external market shocks.
