Govt is Letting Oil Companies Decide Margins on High Quality RON95 Petrol

The government has left the consumers of recently introduced Research Octane Number (RON-95) petrol at the mercy of Oil Marketing Companies (OMCs) by not fixing its margin.

The government has not fixed OMCs margin on RON-95 petrol. Various OMCs charge their margin at a different rate on their own under the cost and competitive basis through the market demand and supply forces.

Effective from November 2016, two new petrol grades i.e. RON-92 and RON-95 of international standard have been introduced

The Ministry of Energy revealed that in the existence of regulated petrol (RON-92), the OMCs have the authority to keep the margin of RON-95 at a reasonable limit.

RON-92 vs RON-95 Petrol

RON-92 is the main grade petrol being marketed in the country under the regulated regime of OGRA. Therefore, its OMCs margin is fixed by the Government annually through Economic Coordination Committee of the Cabinet (ECC).

The Ministry documents state that RON-95 is not the main grade petrol in some main areas of the country under the completely deregulated regime. Therefore, in this case, it is true that rather than Government, various OMCs charge its margin at different rate at their own under the cost and competition basis through the market demand and supply forces.

However, OMCs charge its margin at fixed range in case of main grade petrol of 92 RON. To protect the consumer, the OMCs margin on main grade petrol (RON-92) is being fixed by the Government while in case of petrol (RON-95) being a deregulated entity, its maximum limit may not be fixed.