The oil industry is determined to further increase the prices of petroleum products as the industry is facing a cash flow deficit of Rs35.88 billion due to the lower exchange rate and difference in customs duty.
The Oil Companies Advisory Council (OCAC) wrote a letter to the Oil & Gas Regulatory Authority (OGRA) and the federal government on behalf of Oil Marketing Companies (OMCs) and refineries regarding the pricing mechanism as well as the long-awaited rise in OMCs’ margins.
The oil industry’s body drew attention to the fact that the OMCs are facing a considerable cash flow deficit of Rs 35.88 billion due to the rupee devaluation as well as a difference of Rs 2.93 billion in customs duty.
The letter also pointed out that exchange loss adjustment has been decreased by Rs22.72/litre for gasoline and Rs74.91 for high-speed diesel, two pricing components that the government has reduced unfairly (HSD).
Oil companies sound alarmed on fuel shortage in letter to Govt
The oil business told the federal government that if the present arbitrary pricing continues, it won’t be able to meet the increasing demand as the harvest season is set to get underway.
The OCAC said in the letter that the failure of the authorities to implement oil pricing in accordance with the government-approved formula for the past year had resulted in OMCs losing billions of dollars on a daily basis.
The OCAC demanded authorities to set the oil prices based on a formula approved by the government as well as the authorities should take appropriate measures to steer the oil companies out of the financial crisis.
