Islamabad:Federal Petroleum Minister Ali Pervaiz Malik on Thursday said the government was taking all possible measures to ensure uninterrupted petroleum supplies and reduce the impact of the global oil price shock on domestic consumers.
Briefing the National Assembly Standing Committee on Petroleum Division, he said the international petroleum market was facing an unprecedented crisis involving crude oil, refined products, shipping, insurance and refining capacity.
The meeting was chaired by MNA Syed Mustafa Mehmood.
The committee was told that higher shipping and insurance costs, longer transport routes and exceptionally high refining margins had significantly increased the international cost of petroleum products.
Responding to a question, the Oil and Gas Regulatory Authority (OGRA) said the existing petroleum pricing mechanism was based on a transparent formula available on its website.
The formula includes international market prices and relevant data from Pakistan State Oil (PSO).
The basic price of petrol and diesel is calculated using a seven-day rolling average, the applicable exchange rate and other prescribed components.
The committee stressed the need for greater transparency and public awareness about petroleum prices.
It said consumers should have a clear understanding of taxes, levies, transportation costs and international price benchmarks included in the prices.
The committee also reviewed the status of refinery operations and up-gradation.
The petroleum minister said four of the five refineries had signed agreements for up-gradation, while talks with the remaining refinery were under way.
He said the government was working with refineries to increase domestic production and reduce reliance on imported refined petroleum products.
The committee also expressed concern over the production of high-sulphur petroleum products and their possible environmental impact during the upcoming smog and winter seasons.
The committee discussed petroleum smuggling and was informed that the government was strengthening border controls to curb illicit trade.
The Petroleum Division said end-to-end digitisation of the petroleum supply chain would help identify discrepancies between the quantities entering the system and those being sold.
The committee also discussed gas-sector issues, including gas prices, revenue requirements and the circular debt of Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGC).
OGRA explained the difference between prescribed prices, consumer prices and revenue requirements.
It informed the committee that outstanding amounts involving SNGPL and SSGC required reconciliation.
The committee directed officials to provide updated figures on the liabilities and revenue shortfalls of both companies at its next meeting.
The committee decided to include the Universal Gas Distribution Company (UGDC) and the commercial sale of gas under the new policy as a special agenda item at its next meeting.
It directed that a UGDC representative be invited to brief the committee on the company’s approval, gas procurement and sale mechanism, customers, pricing, transportation arrangements and use of SNGPL and SSGC infrastructure.
The representative will also be asked to explain the applicable regulatory requirements.
The committee also discussed the possibility of providing cheaper fuel to farmers through Light Diesel Oil (LDO).
It decided that the proposal required further examination, particularly regarding its agricultural benefits and safeguards against misuse, diversion and revenue losses.
The committee directed the Petroleum Division secretary to conduct the necessary research and submit details at the next meeting.
During the meeting, officials clarified that the petroleum levy was treated as non-tax revenue and was separate from customs duty and other taxes.
However, the committee noted that the levy was a significant component of petroleum prices.
It observed that the levy was initially intended to absorb fluctuations in petroleum prices but had later become a regular source of government revenue.
The chairman said members had the right to question the basis and justification of the levy.
He stressed the need for greater clarity about its impact on consumers.
Rs1bn allocated for gas schemes near wells
The committee also discussed the provision of gas facilities within a five-kilometer radius of oil and gas wells.
It stressed the need to provide relief and incentives to local communities.
The Petroleum Division secretary informed the committee that Rs1 billion had been allocated for the current year.
Of this amount, 70 per cent would be allocated to SSGC and 30pc to SNGPL for phased execution of schemes.
The committee recommended that the matter be included in the agenda of its next meeting.
It also sought details of previous decisions, implementation progress and utilisation of the allocated funds.
The committee deferred the Natural Gas (Development Surcharge) (Amendment) Bill, 2026, and the Gas Infrastructure Development Cess (Amendment) Bill, 2026.