Ministry submits to companies' demand for higher commissions

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ISLAMABAD: A new hike in POL prices is on the cards, as the Ministry of Petroleum and Natural Resources has agreed to raise the oil marketing companiesí (OMCs) margin on petrol and high speed diesel by 25 paisa and 10 paisa per liter respectively. It has also sought an increase in the dealersí commission on petrol by 0.40 per liter and zero surge on high speed diesel. To this effect, the ministry has sent a summary to the Economic Coordination Committee (ECC) that will soon take it up for approval.

The OMCs had earlier asked the government to increase their margin on petrol and diesel by 150 percent in a meeting held here on Feb 13.The OMCs and dealers also wanted the government to increase the dealersí commission on all POL products instead of leaving it to the caretaker government to decide.

In the ECC meeting, the Ogra is expected to forcefully oppose the move of the ministry, seeking raise in OMCs margin and dealersí commission, as it is of the view that they are all already getting reasonable margins and commissions.

The OMCs had asked the government to increase their margin on petroleum products by four percent and dealers five percent of the prices of petrol, diesel, kerosene and HOBC, arguing that their cost of doing business had increased manifold and it was impossible to run their businesses on the existing volume of margins and commissions.

According to official sources, the ministry had refused to extend the margins and commissions. If the demand gets approved, then the price of petrol, diesel and kerosene would increase by Rs3-4 per liter. So the ministry has deiced to increase the OMCs margin on petrol by Re0.25 per liter and on high speed diesel Re0.10 per liter and an increase in dealersí commission on petrol by 0.40 per liter.

The Ogra says the demands of the OMCs and dealers need no further relief, arguing that they have failed to develop the required infrastructure as per the agreements and terms of the licenses they have acquired which is why most of the companies have not increased their storage capacity of POL produces. And because of this very reason the country at times faces acute shortage of the POL products.

Ogra said the OMCs and dealers are already enjoying reasonable margins; however, it has asked for forensic audit of the profits and the cost of doing business of the OMCs and dealers prior to approval of increase in their profits.

Courtesy: The News

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