Key Takeaways
– Miftah Ismail slams Rs 150 overpayment on domestic diesel due to OGRA’s import pricing and Iran war spreads.
– Proposes PSO-only imports, crude-based pricing at Rs 395 with Rs 45 levy to aid harvest season.
– Calls for full deregulation by May 31, with targeted PSO subsidies.
Islamabad, Pakistan – Former Finance Minister Miftah Ismail has outlined a practical solution to Pakistan’s skyrocketing diesel prices in a recent social media post, urging relief for farmers during the harvesting season. With Pakistan producing 75% of its diesel domestically, Ismail criticizes OGRA’s practice of setting prices based on costly imports, which inflates local fuel costs amid global disruptions from the Iran war.
Miftah Ismail explains, “The spread between low-sulfur diesel in Singapore and crude oil has increased exponentially,” pushing OGRA’s imported diesel price to Rs 496 per liter while crude plus refining costs are just Rs 350—meaning “we are paying Rs 150 more for domestically refined diesel.” This benefits refineries with extra profits to upgrade for lower sulfur, but hits Pakistan’s economy hard.
“Assume imported diesel is Rs 500, domestic Rs 350, 70% local—OGRA price Rs 350 plus Rs 45 levy = Rs 395”
His fix: Restrict imports to PSO, price diesel on Arab Light crude plus margins (e.g., Rs 350), and add a levy on all sales to compensate PSO. “Assume imported diesel is Rs 500, domestic Rs 350, 70% local—OGRA price Rs 350 plus Rs 45 levy = Rs 395,” Ismail posts. The levy covers PSO’s 30% import losses, needed only until October when demand falls. By May 31, “deregulate all petroleum prices” while subsidizing PSO imports as required.
This Pakistan-centric plan leverages self-sufficiency to stabilize prices, protect the rupee, and support agriculture on Money Matters Pakistan’s radar.
