Petrol price in Pakistan is a serious matter as it directly impacts the lives of common people. For the last couple of weeks, multiple issues, including price, deregulation, and payments with credit cards, have been discussed, so we decided to talk about them in this article. We hope that this will be helpful for you.
Petrol Price in Pakistan
First thing first, the petrol price in Pakistan as there has been quite contradicting reports about it in the last few weeks. First media reports suggested that petrol price will come down by Rs. 9 and diesel will saw a jump of Rs. 3, but contradicting it completely, our Finance Minister Miftah Ismail said that the petrol price would be either decreased or increased by only Rs. 0.80, which obviously angered the masses.
Meanwhile, our sources have said that the government was planning to reduce petrol price by Rs. 1 and increase diesel rate by Rs. 3; however, the decision has not been taken yet, mainly due to Prime Minister Shehbaz Sharif’s absence in the country. The people have also criticized this indecision by the government as it highlights incompetency. In short, the prices will be decided once our premier is back in the country. Till then, let’s just all wait.
Deregulation of Fuel Prices
The second major update about fuel prices is their deregulation in Pakistan. In simple words, the government will not have a role in deciding the prices; rather, it will be market competitive as Oil Marketing Companies (OMCs) will set the price. As per media reports, the prices will be deregulated by November 1, 2022. This is the model being followed internationally; however, it could have both positive and negative impacts in Pakistan.
The positive is that there would be competition in the market, and prices could go up or down as per the trend. This is will create a competitive market as all OMCs will give their best to sell their product. However, the major player, PSO in this case, can take benefit from it because it extra benefits being a government-run company. We will know about it once the deregulation system is implemented.
Meanwhile, the immediate negative of this potential decision is that petrol pump owners have opposed the idea stating that they have not been consulted. OGRA is only discussing it with OMCs, which is totally unfair, and we should be a party in it, the petrol pumps representative said.
Then there would be the issue of freight charges. Currently, the government is providing Freight Equalization Margin for all pumps across the country, majorly beneficial for far away regions like Gilgit Baltistan. And in case of deregulation, this subsidy will perish, meaning the OMCs would have to pay the freight charges, leading to expensive fuel in those areas, which would not be suitable for the locals as well as for the tourists.
However, the issue can be resolved if all the companies set a single price at their petrol pumps across the country; for example, PSO pumps would sell the fuel at a fixed price, no matter where it is located, just like the Hi-Octane prices across Pakistan.
Payment through Credit Cards
And then there was an issue of paying petrol pumps through credit cards. A significant number of people pay with cards, but multiple reports suggest that petrol pumps across the country have stopped taking payments through them. So, what was the issue? To understand it, we contacted our sources, and this is what they told us.
As per them, there is a payment conflict between petrol pumps and OMCs. “The banks receive 1.7% as service charges; for example, on Rs. 1,000, the bank will cut Rs. 17; both OMC and petrol pump used to pay it on 50% bases, meaning Rs. 8.5 each,” the sources explained.
However, there is a change in this method as recently, the per liter margin of petrol pumps has been increased from Rs. 5 to Rs. 7. In return, OMCs are asking the pump owners to pay the full 1.7% charges to the banks. And for obvious reasons, the owners are not happy, which has disrupted the credit card payments.
And these are all the current issues with petrol prices in Pakistan. We hope that this article will help you understand them.
What do you think about price and deregulation of the price? Share your thoughts in the comments section.