August 02, 2008	Saturday	Rajab 29, 1429

RAWALPINDI, Aug 1: Oil refineries on Friday criticised the government’s new pricing formula announced on July 30, and appealed to Prime Minister Yousuf Raza Gilani to revise it and avert a crisis in the oil and energy sector.

In a letter addressed to the prime minister, heads of the Attock Oil Refinery (ARL), Bosicor, National Refinery Ltd (NRL) and Pakistan Refinery Ltd (PRL) urged him to review the formula and said it was necessary to ensure continued supplies of petroleum products to domestic consumers and strategic supplies to defence agencies and power sector.

According to sources, the meeting was attended by ARL’s chief executive officer M. Adil Khattak, managing director of Bosicor Wasi Khan, Shoaib Anwer Malik, CEO of NRL, and managing director Ejaz Ali Khan of the PRL.

They pleaded that the refineries would suffer a cumulative annual loss of more than Rs4 billion because of the proposed pricing formula, rendering the refineries’ operations economically unsustainable.

The national exchequer, they said, would also suffer a loss of Rs3 billion because of the reduction in customs duties on high-speed diesel, from 10 per cent to 7.5 per cent.

They said their industry met 11 million tons of national petroleum product requirements of 19 million tons.

Terming the petrol pricing formula disturbing, they said contrary to all economic logic, it caused the price of petrol produced by refineries to fall to 93 per cent of naptha, which was the raw material of the product.

Refiners, they said, recognised that oil prices in the international market had risen to an unprecedented level and they, being responsible corporate citizens, wanted to share the burden with the government.

Refiners, they said, had agreed with the petroleum ministry to review the existing refinery pricing formula, both for ‘deemed duty on high-speed diesel’ and rationalisation of the petrol pricing formula.