ECC okays hike in profit margins of oil firms, dealers

Published December 2, 2021
Minister for Economic Affairs Omar Ayub Khan presides over a meeting of the Economic Coordination Committee (ECC) on Wednesday. — PID
Minister for Economic Affairs Omar Ayub Khan presides over a meeting of the Economic Coordination Committee (ECC) on Wednesday. — PID

ISLAMABAD: Amid double-digit inflation recorded at 11.5 per cent in November, the Economic Coordination Committee (ECC) of the Cabinet on Wednesday did not approve an additional subsidy on five essential kitchen items for two months and green-lighted an increase of 23-25pc in dealers’ and oil companies’ commission on petrol and diesel effective from Dec 16.

The brief meeting of the ECC presided over by Minister for Economic Affairs Omar Ayub Khan immediately stamped decisions taken by a technical committee led by Prime Minister’s Adviser on Finance and Revenue Shaukat Tarin but rejected a Rs10bn bailout package for Pakistan Railways.

Under a surrogate and interim arrangement to sidestep court rulings that bar unelected advisers to take government decisions, the government has created a technical committee of the ECC led by Mr Tarin which actually takes decisions on economic matters. Mr Tarin then exchanges the chair with Mr Omar while all others mostly remain seated to formally declare the technical committee’s decisions as approved.

Informed sources said the Ministry of Industries and Production had come up with a demand for a Rs5.6bn untargeted subsidy on five essential kitchen items for November and December under Prime Minister’s Relief Package through the Utility Stores Corporation (USC) to cope with rising inflationary trends.

The sources said the summary was rejected with the directive to also include the requirement for January and till then utilise USC’s own resources amid anticipation that inflationary pressures may slightly subside.

An official statement said the ECC approved the proposal submitted by the energy ministry for increasing the margins of oil marketing companies (OMCs) and dealers for motor spirit and high-speed diesel (HSD) with effect from the forthcoming revision in oil prices, i.e. on Dec 16.

The government already reached an agreement with petroleum dealers last week for increasing their sale margins when they went on a countrywide strike and created supply disruptions at retail outlets. Under the decision, the dealers’ margins would go up by 25.20pc and that of OMCs by 23.32pc on both products.

That means the dealers would now get Rs4.90 per litre on petrol instead of Rs3.91, showing an increase of 99 paise. In addition, they would get 83 paise per litre higher commission on HSD at Rs4.13 per litre instead of the existing rate of Rs3.30.

The OMCs would get an additional 71 paise per litre on both products, which means a profit of Rs3.68 per litre on both products compared to Rs2.97 at present.

The ECC also approved a summary presented by the Ministry of National Food Security and Research for buying 175,000 tonnes of imported wheat by the World Food Programme (WFP) from Passco’s stock for Pakistan and Afghanistan.

The meeting also green-lighted a summary of the poverty alleviation and social safety division for including beneficiaries of the Ehsaas Kafalat Programme with a proxy mean test score between 29.01 and 37 under the recent National Socio-Economic Registry survey in Ehsaas Emergency Cash Programme. Under the proposal, each beneficiary would be provided one-time emergency cash assistance of Rs12,000 on a first-come, first-served basis.

The ECC meeting also discussed the summaries of the ministry of industries on contractual obligations of the Heavy Electrical Complex and the exemption of duties and taxes for an uninterrupted supply of oxygen in the country for medical purposes and directed for revised summaries.

Published in Dawn, December 2nd, 2021



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