Handing over oil prices mechanism to private sector opposed
Call to reform highly controversial oil pricing formula
August 26
The Pakistan Economy Watch (PEW) on Sunday said that government’s decision to allow marketing companies to fix retail prices of major oil products is against the national interests.
The government has been extracting too much from the masses on account of petroleum levy and GST for which it is being criticised on every concerned forum, it said.
Now, the government wants to divert public anger while keeping its income unchanged which is a major factor behind rising inflation, said Dr. Murtaza Mughal, President PEW.
Government’s decision to restrict the role of the Oil and Gas Regulatory Authority (Ogra) will have very negative affect as the private sector will bleed the masses white for profits, he added.
Like all businesses, oil marketing companies are being operated only for profit, they have nothing to do with public convenience and it is feared that they will not transfer the benefit of reduction in international oil prices to masses.
Dr. Murtaza Mughal said that total deregulation of pricing mechanism with weekly price revision will make it difficult to watch the companies and ensure regular supplies to the consumers in remote areas of the country.
He said that the private sector has already started hoarding and black-marketing in the wake of oil prices announcement on fortnightly basis; weekly prices will give it more power to manipulate masses.
Repeated international crises have proved that market forces cannot be trusted to take decision on merit, he added.
He said that the government has never tried to reduce the impact of oil price hike by lowering its share of petroleum levy or reform pricing formula but it wants oil companies to share the blame which will not be without a price.
New pricing mechanism will not absolve the government completely of its responsibility; it should allow Ogra to continuously monitor prices at retail outlets and direct CCP to thwart any possible collusion among the players, said Dr. Mughal.
Masses will face unreasonable hikes if the oil companies are not made to take prior approval from Ministry of Petroleum and Ministry of Finance as companies will hike prices and before any action they would reduce rates while masses will lose billions in the process.
It must be ensured that the latest decision may not contribute to hike in the cost of daily living particularly for the poorest in society.
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Dr. Murtaza Mughal
Cell: 0321-5157671
President Pakistan Economy Watch
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