Islamabad, , 2026: Meeting of the Standing Committee on Petroleum Division was held at Parliament House, Islamabad, under the Chairmanship of Syed Mustafa Mehmood, MNA. The Committee confirmed the minutes of its previous meeting held on . A Member expressed concern over the late circulation of briefs and emphasized that the relevant documents should be provided to Members at least three days prior to the meeting. The Petroleum Division acknowledged the concern and assured the Committee that such delays would not recur and that all requisite documents would, in future, be circulated within the prescribed timeframe. It was proposed that consideration of the Natural Gas (Development Surcharge) (Amendment) Bill, 2026 (Government Bill) and the Gas Infrastructure Development Cess (Amendment) Bill, 2026 (Government Bill) be deferred to the next meeting. The Committee agreed and deferred consideration of the Bills accordingly.
The Committee received a detailed briefing on the mechanism for determination of petrol and gas prices and the performance and achievements of Pakistan State Oil (PSO) and Oil and Gas Development Company Limited (OGDCL). The Committee was informed that the international petroleum market was facing an unprecedented crisis involving crude oil and refined petroleum products, shipping, insurance and refining capacity. The significant increase in shipping and insurance costs, longer transportation routes and exceptionally high crack spreads had substantially increased the international cost of petroleum products. The Minister for Petroleum Division stated that the Government was taking all possible measures to ensure uninterrupted supplies and mitigate the impact of the international price shock on domestic consumers.
On a question, OGRA explained that the existing pricing mechanism was based on a transparent formula publicly available on its website, incorporating international market prices and relevant PSO data. The basic price of petrol and diesel is determined on the basis of a seven-day rolling average, along with the applicable exchange rate and other prescribed components. The Committee emphasized the need for transparency, predictability and greater public awareness regarding the various components of petroleum prices, including taxes, levies, transportation costs and international benchmarks.
The Committee reviewed the status of refinery operations and upgradation. The Minister for Petroleum Division informed that four out of five refineries had executed agreements for upgradation, while negotiations with the remaining refinery were in progress. The Government was coordinating with refineries to maximize domestic production and reduce dependence on imported refined products. The Committee also expressed concern over the production of higher-sulphur petroleum products and their potential environmental implications during the upcoming smog and winter seasons.
The Committee discussed the issue of petroleum smuggling and was informed that the Government was strengthening border controls and taking measures to curb illicit trade. The Petroleum Division stated that end-to-end digitization of the petroleum supply chain would provide an effective long-term mechanism for identifying discrepancies between quantities entering and being sold through the system.
The Committee also considered gas-sector issues, including gas pricing, revenue requirements and the circular debt of SNGPL and SSGC. OGRA explained the distinction between prescribed prices, consumer prices and revenue requirements and informed the Committee that the outstanding amounts of SNGPL and SSGCL required reconciliation. The Committee directed that exact and updated figures regarding the liabilities and revenue shortfalls of both companies be provided at the next meeting.
The Committee decided to include the matter relating to Universal Gas Distribution Company (UGDC) and the commercial sale of gas under the new policy as a special agenda item for its next meeting. It directed that a representative of UGDC be invited to provide detailed information regarding its approval, gas procurement and sale mechanism, customers, pricing, transportation arrangements, use of SNGPL/SSGCL infrastructure and applicable regulatory requirements.
The Committee also discussed the possibility of providing comparatively economical fuel to farmers through Light Diesel Oil (LDO). The matter was noted for further examination, particularly with regard to its potential agricultural benefits and safeguards against misuse, diversion and revenue leakage. The Committee directed the Secretary, Petroleum Division, to conduct the necessary research and provide details on the matter at the next meeting.
During the discussion, it was clarified that the petroleum levy is treated as non-tax revenue, distinct from customs duty and other taxes, although it constitutes a significant component of petroleum prices. The Committee noted that the levy, initially intended to absorb fluctuations in petroleum prices, had subsequently become a regular source of government revenue. The Chairman emphasized Members’ right to question the basis and justification of the levy and stressed the need for greater clarity regarding its impact on consumers.
The Committee discussed the provision of gas facilities within a five-kilometre radius of oil and gas wells, noting the need to provide relief and incentives to local communities. The Secretary informed that Rs. 1 billion had been allocated for the current year, with 70% proposed for SSGC and 30% for SNGPL for phased execution of schemes. The Committee recommended that the matter be included in the agenda of the next meeting and that details of previous decisions, implementation progress and utilization of the allocated funds be provided.
The meeting was attended by Members, namely Mr. Anwar Ul Haq Chaudhary, Mr. Muhammad Bilal Badar, Mr. Ahmad Raza Maneka, Ms. Shaista Khan, Haji Jamal Shah Kakar, Syed Naveed Qamar, Mr. Asad Alam Niazi, Mr. Salahuddin Junejo and Mr. Muhammad Moin Aamer Pirzada. Senior officers from the Petroleum Division, Ministry of Parliamentary Affairs, OGRA, OGDCL, SNGPL, SSGCL and the Energy Department, Punjab, also attended the meeting.
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