OCAC demands diesel price revision

The recent cut in the prices of petroleum may have earned the government some political mileage but has left the oil industry howling in grief for causing over Rs11 billion inventory losses in a fortnight due to “manipulation of (diesel) pricing”. The government had announced on July 15 a Rs9 and Rs7 per litre cut in the prices of petrol and high-speed diesel (HSD), respectively, for the current fortnight ending July 31. In a protest letter to the Ministry of Petroleum and Oil & Gas Regulatory Authority (Ogra), the Oil Companies Advisory Council (OCAC) – an association of over three dozen oil marketing companies and refineries – has alleged “forced reduction in high-speed diesel (HSD) price at the cost of [oil] industry”. It said the price of HSD for the second fortnight of July had been reduced by Rs7 despite the fact that the price was increasing based on a formula approved by the Economic Coordination Committee (ECC) of the Cabinet on July 28, 2020. “Instead of passing on the increase or absorbing the impact of this increase by reducing petroleum levy, the price was unilaterally and unjustly reduced by applying inaccurate premium”, it alleged.