Pakistan to withdraw from role in oil price-setting

The Pakistani government said that it is considering a proposal to circumvent its involvement in setting local oil prices. The proposal will authorize oil marketing companies (OMCs) to automatically adjust oil prices in line with global oil prices starting fiscal year 2009 to 2010. At present, the price of high speed diesel (HSD) in Pakistan is deregulated based on a federal government formula, whereas the prices of other products including light diesel oil (LDO), kerosene oil, motor spirit, JP-1, JP-4 and JP-8 are regulated and announced by the government at the end of each month. The proposal was made by government officials to the Finance Ministry after the government decided to withdraw subsidy on oil and other products in the forthcoming budget. (June 8, 2009)