Islamabad: Ministry of Petroleum is at loggerheads with the Oil and Gas Regulatory Authority (OGRA) and the Planning Commission over the deregulation of high-speed diesel (HSD) and oil prices.
In this regard, the petroleum ministry has issued a notification to the Economic Coordination Committee of the cabinet suggesting an increase in dealer commission of 33 paisa per litre. The summary also proposed an increase for OMC margins on petrol of 19 paisa and 14 paisa per litre from July 1st. Petroleum ministry thinks that the increase in margins for OMC’s and dealer will spur higher investment in additional storage capacity.
OGRA and the Planning Commission have deemed this move as controversial citing an example of the year 2000, when it was proposed to deregulate the oil sector which didn’t lead to any investment in improving the storage capacity but enabled the OMC’s in earn higher profitability to the tune of billion of rupees.
According to a decision by the ECC in 2014, OMC margins and dealer commissions are being revised on a yearly basis which is linked to the consumer price index for these two products HSD and petrol, the petroleum ministry said. It argued on the basis of this principle, for dealers the price should go up by Rs3.16 to Rs3.35 per litre and for OMC margin on petrol should see a price increase of Rs2.41 to Rs2.55 per litre. On the other hand, oil companies have been demanding an increase of 18paisa per litre instead of the 14paisa per litre suggested.
