ISLAMABAD (PEN) : The federal government’s plan to deregulate petroleum product prices has sparked significant concern, especially from the Pakistan Petroleum Dealers Association (PPDA), which is warning of potential negative impacts on the local market and dealers’ investments.
The PPDA is particularly worried that deregulation could lead to an increase in smuggled Iranian oil and substandard fuel entering Pakistan, undermining the country’s efforts to maintain fuel quality and stable prices. Many petroleum dealers have invested millions of rupees into their businesses, and the association stresses that any decision of this magnitude should be made only after thorough consultation with all stakeholders. This, they argue, has not been adequately done.
Under the proposed plan, oil marketing companies (OMCs) would be allowed to set competitive fuel prices, thus giving them a chance to expand their market share. While this may seem appealing for larger companies, the PPDA fears that it could harm smaller dealers and create volatility in fuel prices. A price ceiling has been suggested to help limit drastic price swings, but concerns about uncontrollable price hikes remain.
Alongside this, the government plans to allow oil refineries to blend up to 5% ethanol into petroleum products, potentially helping to lower fuel costs. While this move could reduce dependence on costly imports, its long-term effects on fuel efficiency and consumer prices are still uncertain.
This situation highlights the broader issue of the need for a more open and collaborative dialogue between the government and stakeholders. The PPDA has urged Petroleum Minister Musadik Malik to meet with them directly to address their concerns. Without such engagement, there’s a risk that the industry may face unintended consequences.
In another development, Minister Malik recently dismissed rumors about the sale of a 15% stake in the Reko Diq mining project to Saudi Arabia. He reassured the public that no formal deal had been reached, stressing that talks were still ongoing. The fact that such rumors have surfaced points to the government’s ongoing challenge of maintaining transparency and clear communication on significant decisions that could shape the country’s future.
As these matters evolve, it’s crucial for the government to carefully balance the need for reform with the stability of Pakistan’s petroleum sector. Ensuring open, honest communication and consulting all relevant parties will be key to moving forward in a way that benefits both the industry and the broader public.
