New pricing system may halt petrol import

The Oil Companies Advisory Council, an industry lobby, has warned officials that a revised fuel pricing scheme might push oil marketing firms to stop importing petrol, according to The Express Tribune. The council has asked that PSO's latest motor spirit cargo costs apply whenever PSO has no import cargo in the previous seven working days. It says the calendar-year-to-date average fails to reflect actual replacement costs.

PSO has roughly a 10-day gap between cargoes scheduled for October 13 to 15 and October 26 to 28, and in that window the current rule could fall back to an average premium of about $13 per barrel. PSO's own later cargoes carry premiums of $28.47 per barrel for late October and $28.76 for early November, so the council estimates an under-recovery of roughly Rs16 to 17 per litre for importers. Industry cargoes are priced well above that average too, it said.

The council cited Rs66.7 billion in outstanding price differential claim recoveries, stagnant margins and rising costs, and has requested an urgent meeting with the secretary. The matter was discussed with the Petroleum Division and Ogra on October 6, where the council was told to submit a recommendation. Pakistan meets about 70% of its motor spirit requirements through imports, which the council says makes accurate import pricing vital for uninterrupted petroleum supplies.