LAHORE: The Oil Marketing Association of Pakistan has pointed out serious flaws in the policy of the Oil and Gas Regulatory Authority (OGRA) regarding foreign exchange losses adjustments and demanded from the regulator to provide level playing field to all companies.
A letter written by Chairman Oil Marketing Association of Pakistan (OMAP) Tariq Wazir Ali to Chairman OGRA Masroor Khan held the later responsible for distress to emerging oil marketing companies.
“Your deliberate negligence towards the demands has been deeply condemned by all oil marketing companies in a recent meeting,” stated the letter. It added that the entire industry barring PSO was facing an existential crisis and it was mainly driven by the lack of a coherent policy by OGRA.
It is the duty of OGRA to ensure that the industry gets a level playing field and that the industry has been miserably failed by the regulator, stated the oil marketing association’s letter to the chairman Ogra, adding, “You have consistently failed to settle foreign exchange losses adjustment, negative IFEM, pricing, oil marketing companies margin revision, and other related issues.”
The record is evident that OMAP is repeatedly knocking on doors of OGRA and petroleum ministry to adopt an efficient mechanism for forex losses disbursement to ensure that each penny of national money goes to the true & eligible entities, without any pick & choose and ill-intended calculation to fetch a fortune for non-entitled entities, it added.
All top companies including multinational players pointed out the serious flaws in the formula and demanded Ogra to fix the formula and ensure a level playing field for the industry except PSO being the benchmark company, the letter pointed out.
The OMAP strongly suggested the establishment of foreign exchange adjustment pool for justified distribution of forex losses among genuine and rightful entities, stated the letter, adding the regulator failed to initiate OMCs margins review, negative IFEM, and stock holding cost and had only focused on negating the demands of the industry on exchange losses.
The regulator’s current role is also seriously closing the doors for new FDIs in the sector and also impacting investor confidence and the ability of the sector to maintain strategic reserves, wrote Tariq Wazir Ali to the chairman Orga.
“It was very unfortunate to observe that on the hidden instruction of the regulator, OMAP, the only legal entity & strong voice of emerging OMCs was denied the right to present its complete point of view, in a very derogatory & deprecatory way, that seems to be a preplanned intrigue,” the letter stated.
The statement issued by Ogra to newspapers is quite weak, unclear, and fails to address the actual issue at hand. The allegations of disbursement of foreign exchange losses adjustment to non-deserving entities are serious and require a thorough investigation. Instead of providing a clear explanation of how these entities were selected and why they were given preferential treatment, your wage statement merely refutes the allegations without providing any evidence or explanation,” state the letter.
“Your statement does not address the larger issue of Ogra policies in favor of big oil marketing companies and discriminatory policies towards emerging OMCs. This is a major concern for the industry and the people of Pakistan, and it requires a clear and transparent response from the regulator,” it added.“We hope you will take appropriate action to address these concerns and work towards creating a level playing field for all players in the market,” concluded the letter.
