OGRA Suggests Market-Based Approach for Setting Petroleum Prices

The Oil and Gas Regulatory Authority (OGRA) has formulated two proposals regarding the transfer of authority to determine petroleum product prices. This development follows the government’s decision to relinquish its control over petroleum pricing.

According to sources from OGRA, the first proposal recommends that OGRA, as the regulator, should be granted the authority to set prices. The second proposal suggests that the market itself should determine prices, with OGRA overseeing the process as a monitor. Both proposals will be presented in a high-level meeting for consideration. The sources further revealed that consultations with the Petroleum Division will take place, followed by the Prime Minister’s approval. The Petroleum Division is expected to make a final decision on pricing within a week. The Prime Minister has directed to cease the government’s responsibility in determining petroleum prices.

The sources also noted that the government does not determine the prices of any other commodities apart from petroleum products, which attracts criticism whenever there is a price hike. There is also a possibility of granting pricing authority to oil marketing companies, although this could lead to monopolistic practices. Petroleum dealers have already expressed concerns over giving pricing control to oil marketing companies.