The Economic Coordination Committee (ECC) decided on Tuesday to transfer the Rs4.12 per litre relief resulting from the price reduction of Pakistan Oilfields Limited (POL) products to refineries, Oil Marketing Companies (OMCs), and dealers for the upcoming two weeks.
According to a senior official who attended the meeting, as quoted by The News, the decision to increase POL prices by Rs4.12 per litre will remain in effect for the next 12 months, with adjustments to be made based on the anticipated oil price relief starting on May 16th.
Consequently, starting May 16th, end consumers will pay an additional Rs85 billion over the next year through increases in the Internal Freight Equalisation Margin (IFEM), OMCs’ margin, and dealers’ margin.
“The top officials of the Petroleum and Finance Divisions, after consulting with the prime minister, will finalize the decision and notify the next POL prices today (Thursday),” the official stated.
Previously, instead of passing on relief to end consumers, the government had twice increased the petroleum levy: firstly, to provide relief to electricity consumers, and secondly, for the construction of the N-25 highway in Balochistan.
In its summary, the Petroleum Division proposed to the ECC an increase of Rs1.87 per litre in the Internal Freight Equalisation Margin (IFEM) for refineries and an increase of Rs1.13 per litre in the OMCs’ margin to help recover Rs34 billion in losses over the next 12 months.
Refineries and OMCs have been facing continuous losses due to the sales tax exemption on POL products since FY25. This measure has not only halted refinery upgrade projects valued at $6 billion but has also increased their operational costs. The ECC has also endorsed the dealers’ margin of Rs1.12 per litre.
