Thursday December 07, 2023

OMAP seeks higher margin, warns of crisis

By Our Correspondent
September 28, 2023

LAHORE: The Oil Marketing Association of Pakistan (OMAP) on Wednesday demanded the government to raise the profit margins of oil marketing companies (OMCs) citing survival issues.

OMAP Chairman Tariq Wazir Ali said that the survival of OMCs was at stake because of the current margins.

Speaking to the media at the OMAP Head Office on Wednesday about the problems faced by OMCs, he said petroleum dealers were being given a profit margin of Rs7.46/litre that should be around Rs15/litre, keeping in view the high inflationary effects on businesses and operational expenses.

Ali said of its total 37 members, 32 were petroleum companies that were suffering from foreign exchange losses due to fluctuations in the US dollar exchange rate..

“On this count, we are running in an accumulative loss of Rs32 billion, which is stuck in our imports due to fast changing and upward trend in the US dollar rate in the recent past,” he maintained.

To a question, he said that on April 9, the government issued a policy that foreign exchange loss of the OMCs, especially the small ones would be covered, but these companies have yet to get their due to cover their huge losses.

The chairman said that OMAP also held a meeting in this regard with the caretaker federal minister, who assured the Association of resolving its genuine problems and sent a summary to the federal cabinet.

Ali pointed out that “if their problems were not solved immediately, most of the oil companies would have no other option but to go for closure”, as their businesses/sales volume has already been reduced to half or a quarter.

To another question, he said that the Oil and Gas Regulatory Authority (OGRA) should play a proactive role in facilitation small OMCs facing survival issues. “Small companies should also be given a chance for OGRA chairmanship,” he added.

The OMAP chairman also called for the resolution of Oil Tankers’ Association problems on a priority basis. He feared that if that was not done, and the transporters went on strike, it would cause a shortage of petroleum products.

The OMAP chairman was of the view that the government had succeeded in curbing smuggling to a great extent, and now it has been restricted to Balochistan only.

Ali said that hike in POL (petrol, oil and lubricant) prices is affecting sales in the business sector. He, however, added that in days to come, POL prices would reduce subsequently with the appreciation of rupee. This relief should trickledown to all sectors and the public, he added.