OMCs profit formula to be reviewed twice a year

The government will review the oil marketing companies'' (OMCs) profit/ margin formula twice a year and make necessary adjustments, if needed, to make sure that the new pricing mechanism does not hurt any stakeholder of down stream industry. Sources said acting Secretary Petroleum G.A. Sabri extended this assurance to OMCs during a meeting of the special committee.
The special committee, headed by National Reconstruction Bureau (NRB), Dr Asim Hussain, met here on Friday to work out modalities to rationalise the oil prices for giving relief to the consumers. Sources said after a categorical assurance, OMCs'' representatives did not press the government for withdrawal of decision of capping their profit/ margin at $100 a barrel level. They assured the committee that OMCs would continue to play their role in maintaining oil supply to the market at a reasonable level.
After Economic Co-ordination Committee''s (ECC) clearance, the government had capped OMCs profit/ margin at $100 a barrel level. OMCs had taken the decision as a cursive step and reacted to it sharply. At least one of OMCs had conveyed to the government in writing that if it did not withdraw the decision of capping their profit / margin it would pull out of Pakistan and take out its investment also.
Foreign OMCs are also concerned over PSO''s dominating role in the oil market. They want a change in weighted average cost (WAC) based price to set aside PSO''s dominating role in the oil pricing system. The aggrieved OMCs were of the view that WAC put them at disadvantage by increasing cost of import of comparatively small market players.
PPP leader Qasim Zia, who attended the meeting on special request, demanded of the committee that it should pass on benefit to the consumers of adjustments made recently to help them offset increasing financial burden due to all time high oil prices.
He was of the view that the consumers were hit hard by unprecedented hike in the oil prices and it should be a top priority of the PPP-led coalition government to protect them as much as possible for immediate relief.