OMCs may get 50 paisa more on each litre

Posted on June 17, 2011. Filed under: Energy crisis, Fossil fuels |

JUNE 17, 2011

ABDUL RASHEED AZAD

The government is likely to increase the margin of Oil Marketing Companies (OMCs) and dealers by 50 paisa, Business Recorder has learnt. Sources in OGRA revealed that the OMCs and dealers had been pressurising the government for a while to increase their margins but to no avail.

However, with the petrol crisis gripping the country the Ministry for Petroleum is forced to backtrack and allow OGRA to increase the margin of OMCs by 50 paisa per litre. Petroleum Minister Dr Asim Hussain has termed the OMCs demands legitimate, saying that the demand for increase in margins was genuine keeping in view best international practices. The petrol crisis however is not expected to be resolved for another 10 days, despite efforts of Dr Hussain to resolve it speedily.

At present the government is providing Rs 1.50 per litre margin to dealers on High Speed Diesel, Rs 1.87 per litre on kerosene and Rs 1.87 on Motor Sprit (MS). Government is providing Rs 1.50 per litre margin to OMCs on Motor spirit, Rs 1.58 per litre margin on kerosene and Rs 1.35 per litre on High Speed Diesel.

After 50 paisa increase for OMCs’ margin it would be as follows: Rs 2 per litre on petrol, Rs 2.08 per litre on kerosene and Rs 1.85 per litre on HSD. The margin for dealers would be following: Rs 2.37 on MS, Rs 2.37 on kerosene and Rs 2 on HSD.

The officials maintained that the ship carrying 50,000 tons of petrol arrived on Thursday at Karachi port and after reaching the port further distribution of petrol to Punjab, AJK and Gilgit-Baltistan would take five to 10 days. At a time when the government is forced to import a huge quantity of petrol on an emergency basis by issuing gallop tender notice, the imported oil would be costlier compared to normal oil imports because of high transportation cost.

Small OMCs have no storage capacity while big OMCs had stopped importing oil after the deregulation of trade due to Rs 4 to Rs 7 per litre price differential claims (PDCs).

Sources said that in a meeting held with OMCs and refineries on Tuesday, the Ministry made it mandatory for large OMCs to maintain required fuel stocks. Three major refineries – Attock Refinery Limited (ARL), National Refinery Limited (NRL) and Bosicor – faced technical problems, causing shortage of petrol.

Pakistan’s total requirement of petrol is 200,000 tons per month, with local production at 60,000 tons while 140,000 tons are imported. ARL produces 18,000 tons of petrol per month. To meet the current petrol shortages, the government has announced that Pakistan State Oil (PSO) will import 190,000 tons of petrol this month, of which 35,000 tons has already reached the country. A ship carrying 50,000 tons is due to arrive at Karachi port. After importing 190,000 tons of petrol along with local production of 60,000 tons next month Pakistan would have a surplus stock of petrol, which would be maintained as a strategic reserve.

Copyright Business Recorder, 2011

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