Petroleum Minister Ali Pervaiz Malik has stated that removing the petroleum levy would lead to a noticeable reduction in petrol and diesel prices, but the government would then need to find an alternative source of revenue to offset the loss.
Minister addresses standing committee
Speaking at a meeting of the National Assembly Standing Committee on Petroleum, chaired by Syed Mustafa Mahmud, the minister said the government had to make difficult but necessary decisions during the recent US-Israel-Iran conflict to ensure uninterrupted fuel supplies across the country. He warned that even a temporary fuel shortage at a single petrol pump could have triggered a serious situation, noting that some countries had deployed military forces to manage fuel crises. He added that refined petroleum products in the international market remain more expensive than they were before the conflict.
Petroleum levy and public expenditure
Discussing the petroleum levy, Malik said the government either finances public expenditure through the levy or consumers ultimately bear the cost through higher inflation. He stressed the need to explain the difference between international fuel prices and domestic pricing to the public.
LPG pricing and regulation
Committee members also questioned the enforcement of LPG prices notified by the Oil and Gas Regulatory Authority (OGRA). In response, the minister said LPG prices are linked to international propane and butane rates, as only 30 to 40 percent of Pakistan's LPG demand is met through local production, with the remainder imported. Malik said LPG auctions remain suspended due to a court stay order. He added that the Attorney General had approached the court on the matter, which referred the case back to OGRA for review. The minister maintained that enforcing LPG regulations falls within OGRA's jurisdiction. Committee Chairman Syed Mustafa Mahmud said OGRA officials would be summoned to provide a detailed briefing on the issue.
Euro-5 fuel standards and refinery upgrade
The petroleum minister also informed the committee that Pakistan is moving towards Euro-5 fuel standards. He said the refinery upgrade policy has been submitted to the federal cabinet and is expected to receive approval at its next meeting. Following approval, the refinery upgrade process will begin, while the Director General Oil will brief the committee on implementation details. Malik reiterated that consumers would not be made to bear the cost of refinery inefficiencies, saying the decision to avoid additional financial burden on the public was made by Prime Minister Shehbaz Sharif.
