June 14, 2008	Saturday	Jamadi-us-Sani 09, 1429

KARACHI, June 13: The Oil Companies Advisory Committee (OCAC) warned on Friday that any change in the refining pricing formula and oil marketing companies’ margin would affect availability of petroleum products.

“The present refinery formula and OMC margins are barely keeping the industry afloat,” said the OCAC Secretary General, M. Ilyas Fazil, in a statement while responding to reports that a summary had been sent to the ECC for revising refineries’ pricing formula and OMCs margin.

“The industry is already facing a serious liquidity crunch because of circular debt created on account of the price differential claims (PDC).

“As of today, the government owes Rs80 billion to the industry and this amount is increasing at Rs1 billion per day,” he said.

“Any hasty decision on formula or margin revision will seriously impact the already burdened industry, leading to worsening of the liquidity crunch, closure of refineries, consequent reduction in petroleum product availability, and a further deepening of the energy crisis,” he added.

Even at present the industry is barely able to maintain adequate product availability on account of the fact that four refineries had to reduce their throughputs drastically during 10 days of last month affecting product availability of other vital products (motor gasoline, jet fuels, and fuel oil for power houses.

These refineries also had to defer some crude imports and the OMCs also could not import the planned volume of diesel due to lack of sufficient funds.

He said the OCAC had already made submissions to the Economic Advisory Council (EAC) as well as to the ministry of petroleum.

The OCAC has urged the government to take all stakeholders on board before affecting any such change.