Lubricant prices are skyrocketing due to oil marketing companies’ monopoly

LAHORE:While petroleum product prices are rapidly adjusting, the cost of lubricants, including gear and brake oil, continues to rise without a corresponding decline, raising concerns about market manipulation.

A recent study reveals that it is the oil marketing companies, not OGRA, that set the prices of these lubricants. Since 2014, when the Ministry of Oil transferred the pricing power from OGRA to these companies, they have been accused of exploiting their position to inflate prices, depriving the public of billions of dollars annually.

Statistics show that Pakistan consumes between 193 and 195 million litres of lubricants per year, with monthly usage exceeding 16 to 18 million litres. Despite fluctuations in global oil prices, the price of motorcycle engine oil has increased from Rs 500 to Rs 1,000 per litre, while gear and brake engine oil for cars and trucks is now between Rs 3,500 and Rs 7,500 per litre.

Khawaja Atif, secretary general of the Petroleum Traders Association, criticised the unchecked power of oil marketing companies, saying they are arbitrarily increasing prices and forcing petrol pump owners to hoard their lubricants. He called for regulation of lubricant prices to protect consumers from unfair pricing practices.

In response, Tariq Wazir Ali, chairman of the Oil Marketing Companies Association, defended the pricing structure. He explained that lubricant prices are not directly linked to petroleum product prices due to complex factors involved, including international market conditions, packaging and processing costs.

Ali also refuted allegations that petrol pump owners are forced to stock lubricants, saying the practice is part of the agreement with the pump operators.

The debate continues as stakeholders call for more transparency and regulation in the lubricant pricing sector.