ISLAMABAD, JULY16: Due to serious operational problems and budgetary limitations, oil marketing firms (OMCs) have requested that the federal government raise their margins for MS gasoline and high-speed diesel (HSD).
The Oil Marketing Association of Pakistan (OMAP) urged appropriate shareholder returns, operational realities, and license conditions for margins in a letter to Chairman OGRA. It forewarned that immediate action is required to prevent pandemonium as the petroleum sector is on the verge of collapse.
According to OMAP, maintaining a 20-day stock costs around Rs. 3.45 per litre sold at a markup rate of 22% annually, while a 10-day stock need adds approximately Rs. 1.50 per liter. The association also reported that, based on a 60-day LC assumption with an import value of Rs. 200 per litre, LC confirmation expenses had increased by 6–10 percent over the previous year, adding a cost of Rs. 1.61 every litre sold.
A 0.5 percent turnover tax is imposed on the industry, meaning that operational costs would be Rs. 1.37 per litre. Durrage charges, on the other hand, add an estimated Rs. 0.5 to each liter sold.OMAP noted that rising energy prices, inflation, and utility bills have increased operational costs, which includes selling, marketing, administration, and other charges. This has resulted in a lot more work and expense involved in operations.
The association also mentioned a lack of liquidity brought on by large sums of money invested in IFEM. Postponements of sales tax modifications and handling fees add an additional 2.15 rupees for each litre sold.In order to ensure that fuel firms in Pakistan continue to exist and operate efficiently, as well as to maintain high levels of customer service, OMAP proposed a new OMC margin of Rs. 19.52 per liter.
