Ogra gives clarifications on upcoming oil price revision

• The regulator calls reports of price cuts speculative, not official.
• Diesel, Kerosene, LDO cuts remain unconfirmed ahead of December 16.
• Speculation is mounting, but the official fuel review has yet to be approved.

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has dismissed media reports that fuel prices could be cut by up to Rs 12 per liter from December 16 as “purely speculative”, saying they did not reflect its position or any official pricing process.

In a press statement, the regulator said it took note of “speculative reports circulating in some sections of the media about alleged initial work in oil prices” and stressed that these do not represent the position of the Authority or any official exercise.

Ogra reiterated that it undertakes oil price calculations strictly as per the instructions of the federal government and within the stipulated time frame.

“Any price-related calculation will be submitted to the Federal Government as and when formally required, in accordance with established procedures and legal requirements,” the statement said.

The clarification comes after several media reports suggested a cut in domestic fuel prices from December 16. Citing official sources, a report said that oil prices in Pakistan are expected to drop by up to Rs 12 per litre, with initial calculations completed and a proposal awaiting official approval.

As per the proposed adjustments, petrol has reportedly become cheaper by 36 paise per litre, high speed diesel (HSD) by Rs 11.85, kerosene oil by Rs 11.70 and light diesel oil by Rs 10.01 per litre.

The same report said that if implemented, the new price of petrol will be Rs 263.09 per litre, HSD Rs 267.80 per litre, kerosene Rs 181.16 per liter and light diesel Rs 153.76 per litre, with Ogra sending its summary to the government on December 15 before the final decision by the Petroleum Ministry on Prime Minister.

Another estimate said that based on the existing tax rates, the ex-depot price of HSD was expected to come down by around Rs 11.80 per liter for the next fortnight ended December 31, while the petrol rate may remain unchanged as the indicative cut was estimated at less than one rupee per litre.

This analysis also suggested that the government could create about Rs 1.28 per liter in additional costs to cover higher margins for oil companies and dealers, as approved earlier in the week by the Economic Coordination Committee (ECC) of the cabinet.

According to the same forecasts, ex-depot prices of kerosene and light diesel are estimated to come down by around Rs 11.50 and Rs 10 per litre, respectively, from the current levels of Rs 192.86 and Rs 173.77 per litre. The depot petrol price currently stands at Rs 263.45 per liter while the HSD price is Rs 279.65 and may drop to around Rs 268 per liter as per the revised calculations.

The latest speculation follows a modest price cut announced late last month when the federal government cut petrol by Rs 2 per liter to Rs 263.45 and HSD by Rs 4.79 per liter to Rs 279.65 for the current fortnight based on recommendations from Ogra and relevant ministries.