The government is working on different options including keeping petroleum product prices unchanged in June in an effort to bail out the oil industry, which fears a worsening oil shortage due to heavy inventory losses.
Sources told
First option is to maintain the existing petroleum product prices for June to shield the oil industry from hefty losses. There are reports the government may cut petroleum prices By: up to
The oil industry had warned the government that there would be acute shortage of petroleum products in June because of cheaper imports By:
Petroleum prices in
On the basis of high-speed diesel import prices for May, the ex-refinery price is calculated at
Officials revealed that the oil industry had informed the government that it would suffer heavy losses if petroleum prices were revised based on prices of imported oil cargoes.
They said it would force the refineries to operate at minimum capacity in a bid to cut losses and avoid sales of products at highly negative margins.
The oil industry has now asked the government to freeze ex-refinery prices of petroleum products for June at May's levels in order to help the industry avoid losses and stave off an oil crisis in the country.
Sources said the Petroleum and Finance Divisions were discussing to maintain the existing petroleum product prices for June. It would be an ideal situation for the government to leave prices unchanged, which would help it to increase taxes on petroleum sales and enhance revenue collection.
According to officials, OMCs had put their import plans on hold because of uncertainty about petroleum prices and on fear of losses due to ex-refinery prices based on PSO imports.
In another option, the government is considering reviewing the oil price formula. It may revise the formula based on average import parity price instead of linking prices with the cost of imported cargoes.
It would help to normalise the situation for the oil industry and OMCs would place orders to meet demand in the country.
Third option being considered is that the government should switch to fortnightly revision in petroleum prices instead of monthly review to bail out the oil industry and ensure smooth fuel supply.
The oil crisis has already emerged.
On
Taking notice of reports of petrol shortage in
OMCs were strictly directed to enhance their logistics networks to upcountry areas to avoid any untoward situation.
© Pakistan Press International, source