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A copy of the ECC summary recieved by DawnNews.
A copy of the ECC summary recieved by DawnNews.

ISLAMABAD: Consumers of petroleum products are being charged an ‘illegal’ additional margin of Rs0.86 per litre for the past two months ostensibly owing to a decision of Federal Cabinet’s Economic Coordination Committee (ECC), reliable sources said on Friday.

Petroleum companies and dealers have overcharged more than Rs700 million from consumers in the past two months without any approval from the ECC.

The additional charge of Rs0.25/litre on petrol and Rs0.10paisa on diesel by oil marketing companies (OMCs) and Rs0.41/litre on petrol and Rs0.10/litre on diesel by dealers began after an ECC decision under which it allowed recovery of interim relief from March to May.

Since then consumers have been fleeced by the OMCs for Rs0.86/litre and a series of additional charges in the name of increase in margin. Even the state owned Pakistan State Oil is indulging in this practice.

The ECC in its meeting held on February 26, 2013 considered the summary dated February 21, 2013 of Ministry of Petroleum & Natural Resources to review margins of the OMCs and oil dealers.

The ministry in its summary had proposed to increase the margin of OMCs and the dealers on motor spirit (MS) by Rs0.25 per litre and Rs0.41/litre respectively while Rs0.10/litre hike on high speed diesel (HSD) oil.

The ministry also suggested carrying out a detailed study within three months to establish basis for revision of margin of OMCs and dealers and submit the report to the ECC for consideration.

A copy of the ECC summary, available with DawnNews, shows that the OMCs and dealers’ margins were revised accordingly w.e.f April 1, 2013.

The Oil and Gas Regulatory Authority (Ogra) had been requested to carry out the requisite study recommended by the ECC keeping in view its role as an ‘independent regulator’ so that a criteria/policy for revision of margins on petroleum products could be developed and submitted to the ECC for approval.

The ministry has also advocated to the ECC to consider and approve additional time limit.

“Since the above mentioned study could not be completed within three months due to various reasons. It is therefore requested that additional time of four months after approval of the ECC may be allowed further in this regard with the advice that Ogra should conduct and complete the requisite study within the proposed time limit. The interim relief/increase in OMCs/dealers margin as at para 1(a) & (b) may continue till further decision in the matter,” the petroleum ministry summary reads.

Available secret document with DawnNews also disclosed that the federal cabinet’s committee in its decision had considered the proposals of petroleum ministry towards increasing the margins of OMCs and dealers on petrol and diesel.

An official letter with a serial Case No.ECC-47/05/2013, dated February 26, 2013 also reveals that the ECC in its decision on review of margins of oil companies and dealers had approved a hike of Rs0.25/litre in OMCs margin on petrol (MS) and Rs0.41/litre in the margin of dealers while Rs0.10/litre in the margins of OMCs and dealers on diesel (HSD).

Similarly, the ECC in its decision had said that a detailed study to establish basis for revision of margins of OMCs and dealers should be carried out within three months and submitted for consideration of the ECC. Till such time, the revision in margins as approved above would be treated as interim relief.