ISLAMABAD: The Petroleum Division has sought a detailed briefing from the Oil Marketing Companies (OMCs) and dealers on Monday (November 9) on an increase in margins. According to the notification, the Petroleum Division has arranged the meeting to review the OMCs and dealers' margins on petroleum products.

Special Assistant to the Prime Minister Nadeem Babar, Secretary and Director General (Oil) Petroleum Division will hold review with the representatives of the OMCs and dealers.

In November 2019, the Economic Coordination Committee (ECC) had linked revision in margins of the OMCs on petrol and diesel with annual average consumer inflation, which is likely to increase their profitability and push up fuel prices, sources said.

The government agreed on revising margins of the OMCs and dealers on motor spirit and high-speed diesel on the basis of annual average of the consumer price index (general).

The government will work out margins of the OMCs and dealers, on the basis of annual average inflation of the fiscal year. The government has already tasked relevant stakeholders, including petroleum, finance, planning, and industry and production divisions, the Bureau of Statistics, and the Oil and Gas Regulatory Authority to finalise recommendations.

Earlier, the revision in margins for the OMCs and dealers was carried out annually in accordance with the consumer price index inflation of variable period. When the last time margin was revised, more than two years of inflation was considered to determine diesel margin.

The fresh revision is necessitated by a substantial increase in the cost of doing business due to rise in inflation and devaluation of rupee since the last revision done on 1 July 2018 and the Covid-19 situation, the sources said.

Copyright Business Recorder, 2020