Islamabad:

All Pakistan Petroleum Dealers Association (PPDA) on Sunday rejected the government’s decision to deregulate oil prices warning of a nationwide strike if the move was not turned.

The association warned that deregulation of oil prices would allow a foreign company to dominate the country’s energy sector and described the decision as economic suicide.

Hassan Shah, the association’s spokesman, criticized the move and said it was not in the country’s best control over Pakistan’s fragile oil market – without consulting stakeholders – not in the best interest in the country.

He warned that deregulation would interfere with the entire supply chain, which led to a monopoly in the oil market. Pakistani refineries, he added, would be forced to shut down as they lack the financial capacity to compete with multinational companies.

Shah emphasized that it would be a serious strategic mistake to remove competition and transfer full control to a single foreign company.

He emphasized that Pakistan’s fuel reserves typically last no more than 15 days. In contrast, free market principles work in countries that maintain month -long oil storage to ensure the supply chain stability.

The deregulation of lubricants and hobc (high octane mixture component), he noted, does not benefit consumers and have instead created a cartel -like oligopoly. In addition, he criticized the Competition Commission in Pakistan (CCP) for not ensuring transparency in the system, as opposed to regulatory bodies in Western nations. As a result, he warned, consumers would end up paying higher prices rather than taking advantage of market liberalization.

Shah also warned that deregulation would burn inflation, weaken the exchange rate and cause a lasting damage to an already fighting economy. Given the unpredictability of Pakistan’s oil market, he argued, no single unit should have full authority over fuel prices as it could trigger a financial disaster.

He called on the Ministry of Defense to assess the strategic consequences of the decision while calling on the government and the central bank to investigate its potential influence on inflation and currencyability.

Politicians, he claimed, should not risk the country’s energy security to reassure a single company. He warned that deregulation would lead to a stable increase in oil prices under various pretext and harming both businesses and the public.

Shah clarified that although Western nations have successfully implemented the pricing of the free market, they did it only after securing a smooth supply chain and maintained month long reserves.

Pakistan, on the other hand, fights to maintain fuel stores beyond 15 days of frequent deficiencies and desiccations, especially in smaller cities. He argued that only strict regulation can prevent refineries, oil marketing companies (OMCs) and fuel stations from artificially inflated prices.

To allow consumers to be exploited, he warned, would destabilize the market and increase costs across all sectors. Given that the fuel requirement is very inelastic, deregulation would have devastating consequences.

Shah called on the government to abandon the plan and insisted that deregulation of oil prices would push the country against an economic crisis.