Recent reports indicate that the Oil and Gas Regulatory Authority (Ogra) and the oil industry are advocating for a gradual deregulation of fuel prices. The proposal includes terminating agreements with petroleum dealers and cartage contractors concerning their commissions, enabling the oil industry to autonomously determine their margins based on competitive dynamics.

This potential deregulation of fuel prices in Pakistan marks a significant transformation in the nation’s oil sector. The phased strategy aims to overhaul various elements, spanning from pump prices to governmental functions, with the overarching goal of alleviating political pressures linked to pricing decisions and promoting a more competitive market landscape.

Petrol prices in Pakistan are influenced by numerous factors, both domestically and globally, including fluctuations in international crude oil prices and changes in the value of the Pakistani rupee against the US dollar.

Government taxes and duties constitute a substantial portion of petrol prices, with changes in policies and taxation directly affecting pump prices. Additionally, transportation and distribution costs contribute to petrol prices, with expenses related to fuel prices, infrastructure maintenance, and logistics influencing the final retail price.

This potential deregulation of fuel prices in Pakistan marks a significant transformation in the nation’s oil sector

Deregulation offers the potential to mitigate political influences on pricing........

© Dawn Business