The Finance Ministry has released the second instalment of Rs 1 billion to the oil marketing companies (OMCs) as compensation against surge in international oil prices, it was learnt here on Thursday. Sources said that each of the oil marketing company would get its share from the compensation as per their percentage in domestic oil market.
Earlier, the Finance Ministry had issued the first installment of Rs 1 billion compensation last month to the meet the demand of oil marketing companies.
The oil marketing companies operating in Pakistan had demanded compensation from the government against its policy of capping oil prices at July 15 level to protect the consumers from unprecedented increase in petroleum products.
The oil prices are on the rise in the international market for the last three-and-a-half-month, but the government is not passing on its impact to the consumers.
The oil marketing companies had informed the government that they were facing loss due to the its policy of not pushing up oil prices in proportionate and it would have negative impact on their business in Pakistan. They demanded compensation so that they could continue their business in the country.
The government accepted the demand and worked out a formula for compensation. The formula is based on share of any particular company in the local oil market.
An official told Business Recorder that the Finance Ministry was examining the claims of the oil marketing companies and the government would clear the remaining amount on completion of the process.
The oil companies had submitted claims of compensation of Rs 5 billion as on October 31. This makes almost 25 percent of the total loss picked up by the government to absorb the loss for increased oil prices in the international market.