ISLAMABAD: Minister for Petroleum Ali Pervaiz Malik on Monday said that local oil refineries would bear an additional burden of around Rs15 billion per month, allowing petrol to be sold at Rs15 per litre below the international market price.
Speaking at a press conference, he said petrol prices were expected to increase by Rs15 per litre on Friday. However, local refineries supported the government’s intervention and helped maintain the existing price.
He said the international oil market remained difficult, with import premiums rising significantly. Before October 31, the premium approved for petrol imports was around $20 per barrel, while subsequent tenders attracted premiums of more than $30 per barrel.
The minister said local refineries met around 30 per cent of the country’s petrol requirements, while the remaining 70 per cent had to be imported at international market prices.
He said Prime Minister Shehbaz Sharif held consultations with local refineries to explore possible measures to provide petrol to consumers at the lowest possible price.
He said the government wanted to avoid a situation in which imported fuel became unavailable, as had happened in France, Indonesia and several other countries.
He thanked the refineries for increasing their production and supporting the government during this difficult period.
He said refineries had earned substantial profits over the past three months compared with previous years and were requested to step forward to support consumers.
Ali Pervaiz Malik said the government would continue to protect consumers while keeping the country’s economic constraints and commitments to the International Monetary Fund (IMF) in view. He said the petrol crack margin for refineries was around $5 per barrel before the crisis but had now increased to approximately $20 per barrel.
The minister said deregulation remained the government’s objective, as competition could improve services and provide cheaper fuel to consumers. He said the current intervention was temporary and the government could return to deregulation within 30 days under the approved summary.
Responding to questions, he said the government had not used the intervention to cover its own losses but had passed on the benefit to consumers. He said the government was also working to increase refinery production and move forward with the long-awaited refinery upgrade policy.
On LPG prices, he said the existing price range of Rs600 to Rs700 was incorrect and the government would announce measures within a day or two. Responding to a question, he said gas supply arrangements were in place to meet consumers’ requirements in November, while the government was making decisions to ensure adequate supplies during December and January.
He said the Ministry of Petroleum had been working extensively since September to ensure gas availability during the winter season. He said the government wanted to resolve the matter at the earliest, adding that arrangements had been made to ensure gas supplies to consumers during all three daily cooking times in November.