The government is facing criticism over its diesel pricing mechanism, with allegations that consumers may have effectively paid around Rs. 30 billion more in just one month because of the way the price of diesel was calculated.
The government recently announced a reduction of more than Rs. 30 per litre in the price of diesel following negotiations with local refineries.
Petroleum Minister Ali Pervez Malik said refineries had agreed to reduce the price of locally produced diesel by more than Rs. 30 to Rs. 32 per litre, with OGRA responsible for finalising the revised rate.
However, critics argue that the reduction could have been significantly greater under the previous pricing mechanism. According to the allegation, diesel could have been around Rs. 44 per litre cheaper if the earlier formula had remained in place.
The central issue revolves around the proportion of diesel that Pakistan imports compared with the amount produced by domestic refineries. Pakistan reportedly imports roughly 30 percent of its diesel requirements, while about 70 percent is produced locally.
Critics argue that these two components should be combined using a weighted average to determine a fairer consumer price.
Instead, they claim consumers are effectively being charged according to the higher imported diesel benchmark, despite a substantial share of the country’s supply being produced domestically at a comparatively lower cost.
This pricing approach has raised questions about whether consumers are receiving the full benefit of cheaper locally refined diesel.
If the claimed Rs. 44 per-litre difference were applied across the country’s diesel consumption, the resulting additional burden on consumers could run into tens of billions of rupees.
The controversy comes at a time when diesel prices are already placing significant pressure on farmers, transport operators, businesses and ordinary consumers.
The petroleum minister himself acknowledged that diesel costs have a direct impact on farmers using tractors and tube wells, as well as people relying on public transport.
The government has defended its recent intervention as an effort to provide relief to consumers amid elevated international fuel prices.
However, the debate over the pricing formula is likely to continue, particularly over whether locally produced diesel should be reflected more directly in the final price paid by consumers.
The Rs. 30 billion figure is an allegation based on the claimed pricing difference and consumption calculations, rather than an independently established government loss figure.
A detailed breakdown from OGRA or the petroleum authorities would be required to independently verify the exact amount.
