Diesel Price Likely to Drop by More Than Rs32 as Government Reaches Deal With Refineries

Federal Petroleum Minister Ali Pervaiz Malik said the Oil and Gas Regulatory Authority (OGRA) would issue the final calculation for the new diesel price shortly.

According to the minister, Prime Minister Shehbaz Sharif directed the petroleum ministry, OGRA and oil refineries to hold several rounds of consultations aimed at providing relief to the public.

Ali Pervaiz Malik said the refineries agreed to the government's request after considering the difficulties faced by consumers.

A reduction in diesel prices is expected to benefit farmers, tractor owners and tube-well users, while students and other passengers travelling by buses could also see some relief through lower transport costs.

The minister said OGRA is an independent regulatory body that makes decisions while considering public interest and the requirements of the country's fuel supply chain.

He added that the government would ensure that the benefit of the expected reduction reaches consumers.

Minister of State for Information Atta Tarar also said OGRA would announce a reduction of more than Rs32 per litre in the diesel price.

He said the reduction in the price of locally produced diesel would provide significant relief to farmers, goods transporters and public transport operators.

Tarar said the government had provided Rs130 billion in subsidies to prevent petrol prices from rising during difficult circumstances and had continued efforts to provide relief to the public during the recent war situation.

According to Petroleum Minister Ali Pervaiz Malik, Pakistan's older refineries cannot process heavier and cheaper crude oil. The government has therefore also decided to begin measures aimed at upgrading these refineries.

He said important progress on refinery upgrades is expected in the coming days under the leadership of Prime Minister Shehbaz Sharif.

The government also plans to increase Pakistan's crude oil storage capacity as part of efforts to strengthen the country's energy security.

Under the proposed plan, crude oil could be imported from friendly countries and stored under a bonded scheme.

Ali Pervaiz Malik said the government intends to address Pakistan's energy-security weaknesses on a long-term basis and urged the public to remain patient, saying the government was aware of the difficulties being faced by consumers.

Atta Tarar said the expected reduction in diesel prices would have positive effects across the wider economy and indicated that more relief measures could be announced in the coming days.