Oil refineries are advocating for a shift to weekly oil price reviews to align more closely with international market fluctuations, reduce pricing delays, and enhance supply planning efficiency in the downstream sector. Currently, petroleum prices are assessed biweekly, but refineries have expressed dissatisfaction with the Oil and Gas Regulatory Authority’s (Ogra) handling of diesel procurement, citing abrupt and inconclusive meetings.
The Oil Companies Advisory Council (OCAC) highlighted the lack of clear guidance on high-speed diesel (HSD) procurement, which has left diesel sale arrangements uncertain and complicated supply planning for refineries. This ambiguity, especially during downward pricing trends, hampers the synchronization of production, inventory, and dispatches, impacting market stability.
OCAC emphasized the need for a consistent regulatory framework that adapts to both downward and upward pricing trends to prevent policy imbalances. They also raised concerns about the commingling of jet fuel with HSD imports, suggesting that jet fuel, having a unique market, should be imported based on its own demand and supply needs.
The refineries noted a pricing distortion in jet fuel, where domestic prices drop significantly without imports, affecting refinery economics and making Jet A1 production unfeasible. To address these issues, clear directives on HSD purchase and sale are needed to ensure orderly supply planning, and jet fuel pricing should align with international benchmarks.
Refineries propose a weekly pricing mechanism to reflect global price movements more accurately and support efficient supply planning. They urge Ogra to provide clear policy guidance post-product review meetings to maintain market order and regulatory consistency.
