ECC Recommends 6.8 Percent Increase in Petrol Company Margins Until June 2021

The Economic Coordination Committee (ECC) has recommended an increase of 6.8 percent in margins of Oil Marketing Companies (OMCs) and dealers on petroleum products until June 2021.

The decision comes as a result of a proposal made by the Ministry of Energy (Petroleum Division) to the ECC to allow an increase in margins based on core inflation, reported Business Recorder.

The Petroleum Division had submitted a summary to the ECC titled, “Review of the Oil Marketing Companies and Dealers Margins on petroleum Products,” earlier this year.


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As a result, on January 28, 2021, the ECC constituted a committee to review OMCs and dealers’ margins on petroleum products holistically and submit recommendations to the ECC for consideration.

The Committee included Special Assistant to the Prime Minister on Revenue (Convener), Special Assistant to the Prime Minister on Power, Special Assistant to the Prime Minister on Petroleum, and Secretary Petroleum Division.

In a meeting of the Committee held on February 4, 2021, it was proposed that interim relief may be given to the OMCs and dealers till the Pakistan Institute of Development Economics (PIDE) study is completed, which is expected to be concluded in June 2021.

After detailed deliberations, the Committee finally recommended that the OMCs and dealers margins may be revised based on the latest available average core inflation of Consumer Price Index (CPI; base 2015-16), as published by the Pakistan Bureau of Statistics (PBS) for the period October 2019 to September 2020 (12 months), i.e., 6.8 percent.

The existing margin of OMCs on motor spirit and HSD will be increased by 19 paisas from Rs. 2.81 to Rs. 3 per liter, whereas dealers’ margin, will increase by 25 paisas in MS from Rs. 3.70 to Rs. 3.95 per liter and HSD by 21 paisas from Rs. 3.12 to Rs. 3.33 per liter.


ECC Makes A Decision on Margins for OMCs and Dealers in Petroleum Products

These margins will be applicable immediately until the PIDE study is finalized.

Applicability of the margin for the period already lapsed, i.e., July 1, 2020, to the current date, shall be treated as a prior period adjustment by the Oil and Gas Regulatory Authority (OGRA).