OMCs body shows concern over registration of FIRs

ISLAMABAD: Oil Companies Advisory Council (OCAC), the representative body of oil marketing companies (OMCs) & refineries, has taken strong exception to high handedness and harassment methods like registration of FIRs against CEOs/ MDs of oil companies.

An OCAC press releases states such actions are further worsening the situation as these companies are working round the clock to improve the stock situation of petrol in the country at a huge financial loss. It says that the major reasons for present shortages of petrol in the country includes import embargo in March 2020, it’s lifting after a month, delayed approvals for imports, easing of COVID-19 lockdowns after two months with a consumer’s tendency to move and drive around with exceptionally low prices, stock buildups in retail network etc.

OCAC says that Downstream Petroleum Sector is arranging supplies at a huge financial loss due to the volatility of prices in the international market. An estimated figure of current replacement cost (loss) in June this year is around Rs17 per litre which translates to around Rs18 billion for refineries and OMCs. Needless to mention, the four public listed refineries incurred a combined loss of around Rs47 billion for FY 2018-19 and FY July 2019- March 2020. Similarly, OMCs suffered foreign exchange losses in the range of Rs40 to 50 billion in the past 26 months or so.

OCAC expressed reservations on the recent allegation of hoarding and stated that the stocks in the Port Terminals of OMCs are essentially transitory stocks which should not be mistaken for hoarding.

OCAC said their demand to determine prices after every 15 days has not been fulfilled which is unavoidable due to frequent changes in prices of petroleum products in the International market and foreign exchange fluctuations Furthermore, the Downstream Petroleum Sector has been neglected far too long and the current Downstream Petroleum Sector Policy dates back to year 1997.

It is regretful that lot of misinformation and blame game directed towards Downstream Petroleum Sector has been observed particularly in past two weeks which is unnecessary and counterproductive. There is an urgent need to review and analyse the inherent reasons.