Refineries to absorb Rs15bn monthly to keep petrol Rs15 cheaper, govt says

The government said on Monday that oil refineries would bear a burden of about Rs15 billion each month, allowing petrol to be sold Rs15 per litre cheaper than the global market price. The announcement was made at a press conference in Islamabad by Petroleum Minister Ali Pervaiz Malik and Information Minister Attaullah Tarar. The reports link the global price pressure to the US-Israeli war on Iran.

Daily Times reported that Prime Minister Shehbaz Sharif met refineries and consulted them on steps to keep petrol cheap amid steep expected increases. An increase of about Rs15 per litre was due to take effect on Friday but was prevented. Malik said refineries helped the government absorb it.

Malik said refineries had raised their throughput and made profits from it over the last three months. He said the refineries' premium was $5 per barrel before the crisis and a limit of $20 has now been set. He also said the government would have to step in to protect the public if further difficulties arose. "The government doesn't want to be cruel to anyone," Malik said.

Malik said the government would return to deregulation once the regional crisis ended, with the current focus on public relief. He said November's fuel supply was fully covered, and decisions on December and January supplies would be taken, with the prime minister directing the necessary steps.

Separately, the government cut petrol prices by Rs3.40 per litre and high-speed diesel by Rs7.76. Petrol will retail at Rs374.51 per litre and diesel at Rs395.20 from Tuesday, November 3, according to a notification by the Oil and Gas Regulatory Authority (Ogra). The government continues to levy Rs114 per litre in taxes and duties on petrol and Rs100 per litre on diesel.

Tarar said Pakistan's macroeconomic indicators have remained largely stable and the economy has been hit less than other countries. He described the fuel subsidy scheme announced by the prime minister on September 13: motorcycle users can register by SMS for a weekly Rs500 petrol concession, and 800cc car users get 10 litres of petrol every 10 days at Rs100 less per litre.

Tarar said unique registered users have crossed 15 million and about Rs27bn has so far been allocated to the relief. Business Recorder reported that the ministers said the relief had gone to owners of small cars, motorcycles and rickshaws. "This is a unique relief that is not available in the rest of the world," Tarar said.