OCAC to withdraw case against OGRA
Islamabad: The Oil Companies Advisory Council (OCAC) – an industry group and Oil Gas Regulatory Authority (OGRA) have settled their two-year-old dispute by reaching an out of court settlement on Thursday. Both the parties were at loggerheads over the fee structure payable by all oil refining, storage, pipeline and marketing companies.
OCAC decided to withdraw the case against OGRA and this dispute arose last year in January when Pakistan Oil (Refining, Blending and Marketing) Rules 2016 were issued by the latter. Both sides reached to an agreement, in which the oil companies licence duration has been doubled from 15 to 30 years with a chargeable fee of Rs2.5m per licence. The annual fee structure will be dependent on throughput sales and market size of the oil company. OGRA will earn Rs167m revenue every year through annual fees and Rs50m will be paid upfront for a one time licence fee by the oil industry.
Under the revised agreement, all oil companies are stipulated to pay a fixed annual fee and PSO will become the highest payer with Rs24m. Oil marketing companies (OMCs) having over 16m tons of throughput would be paying Rs 24m which would be chargeable at Rs22m for yearly throughput of 14-16m tons. The annual fee of OMCs will also fall by Rs2m every year for annual throughput of 2m tones. Smaller oil companies will be needed to pay Rs3m for throughput of less than 1m tons.
Oil refinery companies having throughput of over 6m tons will pay Rs11m annual licence fee and this will slowly decrease by Rs2m for every 2m tons lesser throughput. Pipeline companies with more than 6m tons throughput would be paying a Rs5m annual fee which will decrease to Rs2m in light of 2m ton throughput. Storage facilities will be charged Rs100,000 annual fee and oil testing facilities will pay Rs500,000.
