ISLAMABAD: The Economic Coordination Committee (ECC) that met on May 13, 20024 (Tuesday) has decided in principle to shift the relief of Rs4.12 per litre to refineries, OMCs (oil marketing companies) and dealers from the reduction in the POL products prices due from May 16, 2025 for the next fortnight.
The decision to increase the POL prices by Rs4.12 per litre will continue for the next 12 months, which will be adjusted in the relief in oil prices due from May 16, 2024. This is how the end consumers would pay an additional amount of Rs85 billion in the shape of the hike in Internal Freight Equalisation Margin (IFEM), OMCs margin and dealers’ margin in the next year starting from May 16, 2025, a senior official who attended the meeting told The News.
Three days ago, the relief in POL prices for end consumers was estimated at Rs7 per litre, which in the last 2-3 days has been reduced to over Rs5 per litre as the price in the international market has started going up. “The top functionaries of the Petroleum and Finance Divisions, after consultation with the prime minister, will finalise the decision and notify the next POL prices today (Thursday). Earlier, the government, instead of passing relief to the end consumers, had increased the petroleum levy twice; firstly to provide relief to electricity consumers and secondly for the construction of the N-25 highway in Balochistan.
In its summary, the Petroleum Division proposed to the ECC to hike Internal Freight Equalisation Margin (IFEM) by Rs1.87 per litre for refineries and OMCs margin by Rs1.13 per litre to help recover Rs34 billion in losses in the next 12 months. Refineries and OMCs are facing perpetual losses because of the sales tax exemption on POL products since FY25. This measure has not only stopped the upgrade projects of refineries valued at $6 billion but also increased their operation costs. ECC has also endorsed the dealers’ margin of Rs 1.12 per litre.
