Oil companies seek 150pc more profits

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ISLAMABAD: The oil marketing companies (OMCs) have asked the government to increase their margin on petrol and diesel by whopping 150 percent in a meeting held here on Wednesday.

In the meeting, the dealers threatened to immediately increase their commission by Rs1.25 per liter on all POL products in case the government failed to get the increase approved by ECC.

They said that last time dealers’ commission was increased in October 2011 and the Ministry of Petroleum and Natural Resources kept on promising them that it will increase the commission further in 6 months time, but the ministry failed to do.

“Now we want the government to increase dealers’ commission on all POL products and this issue should not be left to the caretaker government to decide,” the official who attended the meeting stated this while quoting the representatives of dealers.

“If it did not happen then they will increase on their own the commission on all POL products by Rs 1.25 per liter and in case the government stops them, they would move the court of law,” he said.

Abid Saeed, the petroleum secretary, chaired the meeting which was also attended by dealers, top officials of the ministry and oil and gas regulatory authority (Ogra). The OMCs and dealers have demanded 150 percent increase of the existing margins.

In the meeting, Ogra forcefully rejected the demand of the huge increase in OMCs margin and dealers’ commission saying they all are already getting reasonable margins and commissions. In the meeting the OMCs and dealers have jointly placed their demand seeking the margin on POL products in percentage instead of fix margins.

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

According to the official sources, the ministry has refused to extend the margin and commission on POL products in percentage to OMCs and petroleum dealers. And if the demand gets entrained, then the price of petrol, deisel and kerosene oil would increase by Rs3-4 per liter. In the meeting Ogra took on the OMCs and dealers for their unjustified demands and argued that they have failed to develop the required infrastructure as per the agreements and terms of the lisences 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 that OMCs and dealers are already enjoying reasonable margins.

However, Ogra asked for forensic audit of the profit and the cost of doing business of the oil marketing companies and dealers prior to considering their demands. Ogra also said in the meeting that the further raise in margins would swell the price of POL products particularly petrol and high speed diesel. According to the sources, the ministry of petroleum and natural resources would further examine the demand of OMCs and dealers and send the summary to ECC after the nod of Dr Asim Hussain, Advisor to PM on Petroleum and Natural Resources. Dr Asim did not attend the meeting as he was in Lahore for his official engagements.

 

 

Courtesy: The News


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