The Central Bank report has also emphasized that introduction of an appropriate pricing formula for domestic petroleum products is essential to improve the financial viability of the CPC.
“International oil prices are volatile and unpredictable as they are constantly exposed to global supply and demand shocks arising from changing geopolitical conditions and speculative decisions of major oil suppliers. Therefore, maintaining a constant price for domestic petroleum products for long periods creates a burden either on domestic oil suppliers or consumers. A pricing formula could provide a market based solution to this issue, while ensuring transparency in petroleum pricing,” the Central Bank report emphasized.
Although it has been 16 months since the new government assumed power pledging in its Presidential election manifesto to implement a fuel pricing formula, analysts had earlier expressed disappointment that it has not been implemented yet.
“This is a once in a generation opportunity to implement the promised fuel pricing formula under benign market conditions and depoliticises fuel prices. Now or never!,” CEO of JB Securities Ltd. Murtaza Jafferjee said in a recent report.