PPDA condemns oil price deregulation, calls for review

February 21, 2025 (MLN): The Pakistan Petroleum Dealers Association (PPDA) has strongly opposed the government's decision to deregulate oil prices, calling it a unilateral move that could lead to an increase in fuel prices, a significant rise in adulterated oil, and a doubling of Iranian fuel smuggling.

In a letter addressed to Federal Minister for Petroleum Musadik Malik, the PPDA expressed concerns over not being consulted before the announcement.

The letter, signed by PPDA Chairman Abdul Sami Khan, highlighted that the association represents 15,000 petrol pumps across Pakistan but was not taken on board regarding the oil price deregulation policy.

Musadik Malik had recently announced the government’s plan to deregulate fuel prices, allowing oil marketing companies (OMCs) to sell fuel at competitive rates to increase their market share.

Under the policy, OMCs would be allowed to set their prices and sell petrol and diesel below the government’s announced rates.

"I am writing to express our surprise and concern regarding your recent announcement about the deregulation of the oil industry," said Abdul Sami Khan in the letter.

I would like to remind you of our previous meeting at the PSO House, attended by yourself, the Secretary of Petroleum, DG Oil, Chairman OGRA, and MD PSO.

During that meeting, it was clearly conveyed that any moves towards deregulation would not proceed without consultation with the Pakistan Petroleum Dealers Association (PPDA), he added.

PPDA emphasized that as a key stakeholder in the petroleum industry, with over 15,000 retail outlets and investments amounting to trillions of rupees, they strongly condemn the unilateral decision.

"This decision has been made without our input, contradicting the assurance given by the minister in our last meeting that no actions would be taken without prior discussions with us," Khan stated.

While the government argues that deregulation will enhance competition among OMCs and lower fuel prices, the PPDA believes the policy has been announced without adequate consideration of its implications.

One of their major concerns is the potential rise in adulterated oil and a surge in Iranian petroleum product smuggling, which the government has yet to control effectively, he noted.

Furthermore, we request that the minister convene a meeting with a delegation from the PPDA to discuss this matter thoroughly, Abdul Sami Khan concluded in the letter.

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