Last moves before elections: ECC likely to increase margins for OMCs, dealers

Ban on import of CNG cylind­ers and kits may be lifted.  Seven groups had imported 59 consignments of CNG kits and cylinders despite the restriction and now a summary was being tabled before the ECC for clearance of the cargo. PHOTO: FILE


The Economic Coordination Committee (ECC), which is meeting today (Friday), is likely to give the go-ahead to the proposal for increase in margins of oil marketing companies and dealers, leading to a slight rise in prices of petrol and diesel for consumers.

According to sources, the ECC in its meeting, to be chaired by new Finance Minister Saleem Mandviwalla, will discuss proposed increase of 12.5% (25 paisa per litre) in margin on petrol for OMCs and 17.2% (41 paisa) for dealers. For diesel, a 5.7% (10 paisa per litre) upward revision in margin has been proposed for OMCs, but no change has been sought in dealers’ margin.

At present, OMCs earn a margin of Rs1.98 on every litre of petrol and Rs1.76 on diesel. Dealers collect a margin of Rs2.37 on petrol and Rs2.2 on diesel.

Sources told The Express Tribune the Oil and Gas Regulatory Authority (Ogra) had resisted the upward revision in margins of OMCs and dealers and instead suggested an audit to determine how much profits they were making. The oil and gas regulator was of the view that OMCs and dealers were making hefty profits and any increase in their margins was unjustified.

CNG kits

The ECC is expected to lift the ban on import of compressed natural gas (CNG) cylinders and kits, providing leeway to seven powerful groups and an Italian firm.

Sources in the Ministry of Industries said the seven groups had imported 59 consignments of CNG kits and cylinders despite the restriction and now a summary was being tabled before the ECC for clearance of the cargo.

The Federal Board of Revenue (FBR) has said out of 59 consignments of cylinders, importers have furnished particulars of bills of lading and purchase orders for 26 consignments. Though the bank concerned has verified the bills of lading, no verification of purchase orders has been given.

Accordingly, it said, dates for letters of credit, bank contract or bank agreement for pending consignments of CNG cylinders were not available with the FBR.

The ECC will also take up the proposal calling for removing the restriction on Landi Renzo Pakistan, part of an Italian group, which imports CNG cylinders and kits for export. The company is engaged in the manufacture and assembly of CNG kits. It imports CNG cylinders and parts/components of cylinders and kits.

Nandipur power project

The ECC will take a decision on a summary, submitted by the Ministry of Water and Power, seeking government guarantees for borrowing Rs23 billion from domestic banks, which will be spent on the construction of 425-megawatt Nandipur power project.

The government is raising funds from domestic sources after Chinese banks refused financing for the project.

“Chinese contractor Dongfang Electric Corporation has expressed its willingness to implement the project if the government arranges financing from local resources,” an official of the water and power ministry said.

Total finances required for the combined-cycle power plant, to be installed in Nandipur near Gujranwala, is Rs57 billion.

Published in The Express Tribune, February 22nd, 2013.

Like Business on Facebook to stay informed and join in the conversation.

View the original article here

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>