Petroleum Minister Ali Pervaiz Malik has said the government is unlikely to reduce the petroleum levy unless it can identify another source of revenue to compensate for the financial shortfall, warning that such a move would be difficult to secure without the approval of the International Monetary Fund (IMF).
Speaking during a meeting of the Senate Standing Committee on Petroleum, the minister explained that any reduction in the levy would affect government revenues and would require a credible alternative before it could be considered. He said the IMF was unlikely to support the proposal unless Pakistan presented a replacement revenue stream.
The committee also discussed the country’s fuel pricing mechanism, with several lawmakers expressing concerns over the introduction of daily price adjustments. Members argued that frequent revisions create uncertainty for consumers and make it difficult for the public to understand fuel costs.
Responding to the criticism, Malik defended the system, saying the government had removed political influence from fuel pricing by giving the Oil and Gas Regulatory Authority (OGRA) the authority to determine prices through an independent and transparent process. He said the mechanism was designed to reflect international market trends more accurately.
The OGRA chairman informed the committee that local petrol and diesel prices are linked to fuel product prices in the Singapore market rather than international crude oil prices. He said the daily pricing system allows authorities to respond quickly to changes in global markets and helps reduce the impact of sudden price fluctuations.
However, some lawmakers remained unconvinced. They argued that the pricing formula is too complicated for ordinary consumers and warned that frequent changes place additional financial pressure on households already struggling with rising living costs.
The committee also raised concerns over the lack of performance audits of oil drilling rigs operating in the country. Members directed the relevant authorities to complete and submit an audit report within seven days to assess operational standards and efficiency.
During the meeting, lawmakers questioned the continued delay in appointing a permanent chairman of OGRA. The petroleum minister replied that the recruitment process had been restarted after the earlier selection exercise failed to identify a suitable candidate.
