Petroleum minister hints at fuel price relief after Pakistan’s oil cargoes clear Bab-al-Mandeb

ISLAMABAD: Petroleum Minister Ali Pervez Malik on Monday hinted at a decline in petrol and diesel prices following the clearance of Pakistan’s oil cargoes stuck at the Bab-al-Mandeb chokepoint due to Houthi attacks.

“Today’s good news is that our ships stuck at Bab-al-Mandeb have come out safely,” the minister said, adding that crude oil, diesel and petrol prices were easing in the global market.

The minister, who spoke to journalists after talks with the Oil Tankers Contractors Association (OTCA), said the government had put in place a transparent pricing formula that would hopefully lead to an improvement in prices.

He said the formula, based on the weekly average of the international market, was being operated by the Oil and Gas Regulatory Authority (Ogra), and that if not today, prices would start declining from tomorrow, depending on the weekly average.

Responding to a question about whether the government could return to weekly or fortnightly pricing after the current crisis was over, the minister said, “Let the people benefit from the declining trend first and then we can discuss the future.”

Talking about the talks with the OTCA, the minister said tanker owners and operators had some issues with Ogra regarding the allocation of quotas for road transport of petroleum products and transportation charges, which had remained unchanged since 2023. He said freight charges were mostly linked to diesel prices, besides a fixed charge.

He said a committee had been constituted to look into the inflation-related aspect of fixed charges so that a fair adjustment could be allowed for tanker operators in line with the Constitution, which guaranteed legitimate returns to all citizens.

He added that the quota allocation for road transport of petroleum products would also be examined by the committee to correct any favouritism or discrimination.

The committee, which also included an OTCA member, would submit its report on Tuesday with recommendations for the way forward, he said.

Earlier, the two sides agreed to form a committee to address issues facing tanker owners within two weeks, the Petroleum Division said.

According to a statement issued by the Petroleum Division, the talks between the government and the OTCA were successful.

The OTCA delegation, led by its president, Abidullah Afridi, concluded the meeting on a positive note, with both sides agreeing to work together to resolve the issues facing the oil tanker industry, it added.

Moreover, a committee led by the special secretary for petroleum was constituted to examine the concerns raised by the association and submit its recommendations within one week.

The committee comprised the director general (oil), representatives of the Oil and Gas Regulatory Authority (Ogra) and the OTCA, and the secretary general of the Oil Companies Advisory Council (OCAC).

During the meeting, the OTCA delegation presented its key demands, including a reduction in the White Oil Pipeline quota, a transparent mechanism for the award of freight contracts by oil marketing companies (OMCs), linking the freight formula to the Consumer Price Index (CPI), and the immediate discontinuation of commercial loading.

Petroleum Minister Ali Pervaiz Malik directed Ogra to work closely with stakeholders to address the genuine concerns of oil tanker contractors, the statement said.

The minister requested OMCs to submit their written policies governing the award of freight contracts so that any discriminatory practices, if found, could be addressed.

Furthermore, he instructed Ogra to ensure effective tracking of oil tankers and that dealers’ vehicles were not included in primary transportation.

“The government’s foremost priority is to ensure uninterrupted fuel supplies and facilitate the public,” the statement quoted the minister as saying.

“All stakeholders must work together in the national interest, particularly during challenging times,” he stated, assuring the OTCA delegation that all genuine concerns would be given due consideration and resolved through mutual consultation.

The OTCA appreciated the minister’s positive approach and welcomed the constitution of the committee, expressing confidence that the issues would be resolved through dialogue and cooperation. ...