Oil marketing companies against reduction in diesel price
Business
Claims continuous fuel won’t be possible, industry suffered Rs11bn loss
ISLAMABAD (Web Desk) – The government decision to slash the petrol and high-speed diesel (HSD) prices have certainly made the people happy, but it is not the case with the oil marketing companies which said that uninterrupted fuel supply could not be possible in the given scenario.
They claimed that the move caused a Rs11 billion loss to the industry and that the HSD price should have been increased instead, citing a formula approved by the Economic Coordination Committee in July 2020.
In a letter addressed to the Oil and Gas Regulatory Authority (Ogra) chairman, the Oil Companies Advisory Council (OCAC) accused the body of forced reduction and manipulation in determining the latest rate fixed for the fuel.
With effect from July 16, the government had decided to reduce the petrol rate by Rs9 per litre and that of HSD by Rs7, citing a stronger rupee as the main reason.
However, the representative body of oil marketing companies said the government should have cut the Petroleum Development Levy (PDL) if it wanted to reduce the HSD price which was “unilaterally and unjustly reduced by applying inaccurate premium”.
Read more: Today's puzzle: POL prices - Fill fuel tank now or wait till 12am?
According to the OCAC, premium and other incidentals for the previous fortnight are to be applied if the Pakistan State Oil (PSO) did not import a particular commodity. In this particular case too, the PSO did not import any HSD during the first fortnight of July 2023, meaning that the previous premium – $11.50 per BBL – should have been used in price computation. Bu the Ogra used premium of $4.20 per BBL which was against the ECC decision.
They also presented their own calculations which show that the impact on price was Rs12.79 per litre while the premium and the exchange rate stood at $7.30 per BBL and Rs278 respectively.
