OMCs May Soon Be Able to Set Prices of Kerosene and Light Diesel On Their Own

The federal government has revived efforts to de-regulate kerosene and light diesel oil prices. The Petroleum Division has suggested keeping the petroleum levy at Rs. 50 per liter for both grades once de-regulated. The levy will be amended based on rates announced by the government from time to time, reported a national daily. Currently, only furnace oil and high octane are de-regulated, while the government sets prices for diesel, petrol, kerosene, and light diesel oil every two weeks. If approved, the government will only regulate high-speed diesel and petrol. The proposal to de-regulate kerosene and light diesel oil could ease inflation as well as the fiscal deficit, both of which the government has been trying to control with the help of the International Monetary Fund. It bears mentioning that the government first tried in 2022 to de-regulate kerosene and light diesel oil, but the Economic Coordination Committee of the cabinet at the time rejected the plan fearing it may hurt farmers as they use both fuels for cooking, irrigation, and lighting. Kerosene and light diesel oil represent less than 10 percent of overall domestic fuel consumption in Pakistan.