Hike in prices of POL products: OMCs make Rs113bn profit

The government’s decision to apply a Rs 55 per litre price jump to current fuel reserves has triggered allegations of enabling oil marketing companies (OMCs) to make Rs 113 billion windfall profits in inventory gains, though industry representatives and government advisors argue that the pricing model—based on international Platts averages—requires them to replenish sold stock with much more expensive fuel. Officials of Petroleum Division on condition of anonymity said that the new price is not based on the cost of a particular shipment purchased weeks earlier but fuel prices determined by using the average Platts benchmark price for petrol and high speed diesel (HSD) during the pricing period, along with exchange rate adjustments.