The Senate Sub-committee on Cabinet Secretariat met on Thursday under the convener ship of Senator Saadia Abbasi to examine in detail the modalities of Oil, Gas Import and Electricity Pricing by the NEPRA and OGRA. The Chairman OGRA informed the committee that the parameters to determine import prices of Petrol and Diesel, the base price is fixed on the basis of 15 days average FOB prices of the Arab Gulf market ( Published in the Platt’s Oil gram). The fortnightly prices are determined in term of US dollars and converted in to Rs./liter by applying last available provisional exchange rate for computation of the prices. The exchange rate variations are actualized at the time of revision in net prices based on the actual exchange rate being applied on the retirement of PSO’s LCs. It was apprised that the mechanism remained effective as long the depreciation of rupee remained smooth. The rate used in the previous fortnightly price determination was Rs. 209.7251/$. The exchange rate used by OGRA for the prices for the first fortnight of August, 2022 is 236.0394/$. It was suggested that the rate of the last day should be taken for the purpose of price calculation. This would smooth the impact of rupee depreciation on the petroleum product prices. It was informed that guidelines was issued to ORGA to use the average of exchange rate for the relevant period rather the exchange rate of the last day for current as well as all future price determination. However the OGRA pointed out that as a result of this change the price increase for the next fortnight would be abnormally high of the oil prices and exchange rare remain at the same level. The Chairman OGRA said that if crude oil is refined in Pakistan and diesel is extracted the Gross Refinery Margins will make a difference of 57 $. He lamented that 2 refineries in Pakistan are not functional he said that in non-utilization of single barrel we lose almost 50 $ - 60 $. Senator Engr. Rukhsana Zuberi inquired that how do we determine whether or not the quality of the oil is Parallel to its price to which it was replied that 05 recognized international consultants verify the product and is re-verified as it enters the country by the HDIV. The committee inquired on the pricing formula and the list of licensed companies and their shares.
The Chairman National Electric power Regulatory Authority (NEPRA) stated that fuel price determination is not the job of NEPRA and our job is supply affordable, reliable and sustainable power services by the generation, transmission and distribution companies. He said that our slogan is no imported fuel based projects. He said that 4 to 5 months earlier the cost of imported oil was 50 $ per ton which increased by 10 times to 400 $ plus /ton.
The committee also inquired on the K-Electrics and its safety issues in Karachi. Rukhsana Zuberi said that Karachi has severe safety issues and the wires are not being earthed due to which multiple accidents are taking place. The sub-committee decided to visit Karachi and also take briefing from K electric.
The meeting was attended by Senator Mushtaq Ahmad Khan and Senator Engr. Rukhsana Zuberi. Chairman OGRA and chairman NEPRA and other officials of the concerned department were also in attendance.