LAHORE: Chairman of the Oil Marketing Association of Pakistan (OMAP), Tariq Wazir Ali, has voiced concerns over the escalating financial challenges confronting OMCs following the removal of sales tax on petroleum products. With over Rs60 billion entangled in sales tax liabilities, the sector is grappling with severe financial strains.
OMAP has issued a fervent appeal to the Federal Board of Revenue (FBR), urging swift refunds to alleviate the mounting financial pressure. In a letter addressed to Petroleum Minister Musadiq Masood Malik, Chairman Ali underscored the imperative need to address a multitude of pressing issues plaguing the petroleum industry. These encompass Foreign Exchange Losses, OMC Margins, Sales Tax, Smuggling of Iranian Diesel, and the Revision of Pricing Mechanism.
Highlighting the flaws in the current policy framework, OMAP raised issues such as the lack of clarity surrounding the benchmark tenure of Letter of Credits and the inconsistent utilization of FX rates. In a bid to offset verifiable FX losses, OMAP has proposed the implementation of a pool system to compensate OMCs, alongside advocating for a comprehensive audit from 2020 onwards to ensure transparency.
OMAP has vehemently denounced the rampant smuggling of Iranian petroleum products into Pakistan, stressing its detrimental impact on the economy and legitimate businesses. Urgent action is urged to curb this illicit practice.
Furthermore, OMAP has suggested a revision of OMC margins to approximately Rs16 per litre to safeguard the industry’s feasibility and long-term survival.
The cumulative ramifications of these challenges have pushed the petroleum industry to the brink of collapse. OMCs are grappling with financial instability, credit line constraints, and the looming spectre of potential blacklisting, posing grave risks to the sector’s viability.
Copyright Business Recorder, 2024
Comments
Comments are closed.