Oil industry protests 'forced' price freeze.

ISLAMABAD -- The country's oil industry on Wednesday protested over the 'manipulation' of the pricing mechanism by the government in its latest fortnightly review to maintain existing ex-depot rates of petroleum products for the next 15 days.

'This forced stabilisation of oil prices at the cost of the industry is not sustainable and will severely impact the already crippled oil industry,' wrote the Oil Companies Advisory Council (OCAC) - an umbrella organisation of more than three dozen oil marketing companies (OMCs) and refineries - to the Ministry of Energy on Wednesday.

The government on Tuesday announced to keep the prices of all products unchanged following political pressure built up by opposition Pakistan Tehreek-i-Insaf (PTI), although market players, including Ogra, had calculated increases in POL prices with effect from Nov 16.

The oil industry said the prices were maintained by the government in violation of the pricing mechanism that has been in place for years. The unilateral change in pricing is estimated to cost the oil industry more than Rs7.6bn over the next 15 days.

Says 'manipulation' to cause per-litre loss of Rs8.34 on petrol and Rs7.15 on diesel sales, costing industry Rs7.6bn in 15 days

The OCAC said the price freeze would cause OMCs a loss of Rs8.34 on the sale of each litre of petrol and Rs7.15 on each litre of high-speed diesel (HSD), with a cumulative financial fallout of Rs7.55bn.

It said the prices of motor fuels had been kept unchanged for the second fortnight of November even though the rates were increasing based on the pricing formula approved by the government itself. It said the price components were 'very forcefully and unjustly reduced' instead of passing on the increase or absorbing the increase by reducing the petroleum levy.


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