Parliament Probes Petrol Hike, Oil Supply Risks

ISLAMABAD: In response to a lack of bids on spot tenders for petroleum imports and requests from the oil sector for special war-risk insurance coverage, a parliamentary committee convened on Monday to scrutinize the recent 20% rise in petroleum prices, aiming to determine whether the increase primarily benefited the government treasury or resulted in disproportionate inventory gains for private oil companies.

Industry stakeholders expressed concerns that regulatory interventions against retail outlets temporarily out of stock—implemented under directives to curb malpractices—were counterproductive, potentially exacerbating supply disruptions. Meanwhile, the government’s decision to raise fuel prices despite adequate existing stock prompted scrutiny from the Senate Standing Committee on Economic Affairs.

Led by Senator Saifullah Abro, the committee highlighted public concern over the 20% hike and its impact on low-income households. The senator directed the petroleum division to provide detailed information on oil marketing companies (OMCs) to assess the allocation of benefits from the price increase.

The Oil Companies Advisory Council (OCAC), in correspondence with federal entities including the State Bank of Pakistan, highlighted extreme volatility in international oil and shipping markets due to the Iran–Israel–US conflict. They noted that marine insurers had either withdrawn or drastically increased war-risk premiums for Persian Gulf operations, and freight rates had surged nearly fourfold.

OCAC Secretary General Dr Syed Nazir Abbas proposed that petroleum imports—including crude, refined products, base oil, and allied materials—be allowed temporarily under CIF (Cost, Insurance, and Freight) terms instead of the standard C&F (Cost and Freight) framework, enabling smoother procurement despite exceptional insurance and shipping constraints. The proposal seeks a two-month temporary allowance to mitigate risks to national fuel supply.