Latest news with #Ogra
Express Tribune
2 days ago
- Business
- Express Tribune
OMCs failing to keep 20-day stock to face penalties
The Oil and Gas Regulatory Authority (Ogra) has decided to impose penalties and in some cases suspend licences of oil marketing companies (OMCs) over failure to maintain 20-day oil stocks and lift the required petroleum products from refineries. The refineries will also face Ogra's action if they produce less-than-committed volumes for three consecutive months. In a letter to the leading OMCs, Ogra said it has observed that numerous OMCs were not adhering to their commitments made during the product review meeting (PRM) regarding the lifting of stocks from local refineries. "This failure to comply with the PRM directives is not only adversely impacting Ogra's oil supply chain management but is also damaging energy security and causing substantial revenue losses due to imports, which is tantamount to violation of the authority's directions," the regulator said, adding that after careful consideration and thorough deliberation, it made the decision that the OMCs which fail to lift local products vis-a-vis their commitment/ allocation in the PRM from refineries, fail to maintain 20 days of stock and the refineries which produce less-than-committed products for three consecutive months, would be placed before the authority for consideration of suspension of their marketing licence. The regulatory authority, during its meeting held on May 29, 2025, reviewed serious contraventions related to stock maintenance and product procurement. After deliberation, it approved immediate imposition of penalties by the department concerned under Rule 69 of the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016. As per Rule 37, the OMCs that failed to maintain the mandatory 20-day stock cover in March 2025 shall be penalised based on the shortfall in the average stock days. The OMCs which maintained less than five days of stocks will face a penalty of Rs10 million, for five or less than 10 days of stocks, the penalty will be Rs7.5 million, for 10 or less than 15 days of stocks, the penalty will be Rs5 million and for 15 or less than 20 days of stocks, the penalty will be Rs1 million. The regulator will also slap penalties on the OMCs that lifted insufficient products from the refineries. It will impose a penalty on the refineries that failed to supply allocated products to the OMCs and even those refineries will face action that produced less than the quantity committed in the PRM during March 2025. The OMCs which had more than 10% and less than 25% shortfall in lifting petroleum products from the refineries will face a Rs1 million penalty, in case of more than 25% and less than 50% shortfall, the penalty will be Rs5 million, in case of more than 50% shortfall, the penalty will be Rs7.5 million and those which had a shortfall of more than 75% in supplies from the refineries will face a Rs10 million penalty. For April 2025, the regulator directed the department concerned to issue show-cause notices to the relevant OMCs and refineries by May 30, 2025. A response period of seven working days from the date of issuance was granted. The authority further advised that show-cause notices for May 2025 be issued by June 20, 2025. Future enforcement measures Ogra has decided that any OMC failing to lift local products in relation to its PRM commitment or maintain a 20-day stock cover, and any refinery under-producing against its commitment for three consecutive months, will be subject to the possible suspension of their marketing licence. The enforcement department has been instructed to issue this directive to all the entities concerned. The authority has told the enforcement department (legal) to finalise the draft of "Petroleum Products Review Meeting Regulations, 2025" in consultation with the relevant departments. The draft will be submitted to the stakeholders for feedback, who will be allowed a period of seven working days to provide their comments.
Express Tribune
4 days ago
- Business
- Express Tribune
Petrol price up by Re1, LPG down by Rs4.62/kg
Listen to article The federal government has raised the petrol price by Re1 for the next fortnight, while keeping the high-speed diesel rate unchanged. The new prices will be applicable from June 1. According to a notification issued by the Finance Department, petrol will now be sold at Rs253.63 per litre while high speed diesel (HSD) will continue to be sold at Rs254.64 per litre. The finance ministry said that the prices were based on recommendations from OGRA and other relevant ministries. The government is focusing more on collecting petroleum levy on petroleum products to redirect to subsidize electricity prices. It had earlier decided to fund Rs1.70 per unit subsidy for the consumers of electricity by redirecting PL collection. It also later decided to redirect PL collection to fund canal and road projects in Balochistan province. The government has already decided to increase the petroleum levy rate up to Rs90 per litre on the sale of oil products. At present, the consumers are paying Rs78 per litre in petroleum levy on petrol and Rs77 per litre on diesel. LPG The Oil and Gas Regulatory Authority (Ogra) has reduced the price of Liquefied Petroleum Gas (LPG) for June 2025 in response to fluctuations in the global market. According to an Ogra notification, the new consumer price of LPG has been set at Rs2,838.31 per 11.8 kg cylinder, down from Rs2,892.91 in May. This reflects a decrease of Rs54.60 per cylinder, or Rs4.62 per kilogram. The regulator attributed the price reduction to a 2.67% drop in the Saudi Aramco Contract Price (CP), which directly impacts local LPG producer rates. Additionally, a slight 0.35% increase in the average dollar exchange rate was recorded. For June, Ogra has set the revised producer price at Rs199,234.49 per ton, which stood at Rs203,861.82 in May - causing a decline of Rs4,627.33 per ton. Irfan Khokhar, Chairman of the All Pakistan LPG Distributors Association, welcomed the reduction in LPG prices and urged the government to ensure that the official price set by Ogra is strictly enforced.
Express Tribune
21-05-2025
- Business
- Express Tribune
Increase in petroleum levy in the offing
Listen to article The government has decided to make a massive increase in petroleum levy up to Rs90 per litre on the sale of oil products, which will be collected from consumers. "The federal government, in exercise of powers conferred under Section 8 read with Section 3(1) of the Petroleum Products (Petroleum Levy) Ordinance, 1961, authorises the Petroleum and Finance Divisions to make adjustments – with the approval of the prime minister — in the rate of petroleum levy on petroleum products, up to a maximum of Rs90 per litre, to ensure timely fortnightly revisions in petroleum prices," the Economic Coordination Committee (ECC) said in a recent meeting. At present, the consumers are paying Rs78 per litre in petroleum levy on petrol and Rs77 per litre on diesel. During previous decisions relating to revision in petroleum prices, the federal government had decided to redirect the collection of petroleum levy to subsidise electricity consumers and finance road and canal projects in Balochistan. The decision was taken while discussing matters pertaining to sales tax on refineries and oil marketing companies (OMCs). The Petroleum Division briefed the forum that petroleum products (Mogas, diesel, kerosene oil and light diesel oil) had been classified as "exempted" under the Finance Act 2024. As a result, the refineries and OMCs incurred the cost of input sales tax (Rs34 billion for financial year 2024-25), which could not be recovered through product prices, which are regulated and fixed by the Oil and Gas Regulatory Authority (Ogra). A proposal to levy 3-5% sales tax on motor spirit (MS or petrol) and high-speed diesel (HSD) was developed in consultation with the oil industry, Finance Division and Federal Board of Revenue, but it could not be implemented due to the lack of agreement with the International Monetary Fund (IMF) on reducing the tax rate. It is worth noting that the standard general sales tax (GST) of 18% on MS and HSD will result in a price rise of around Rs45 per litre, which is not desirable. Any changes to the tax rate will require prior consultation with the IMF as well as approval of parliament. Besides the sales tax issue, the OMCs and petroleum dealers requested an increase in their margins on MS and HSD. In that regard, Ogra recommended an increase of Rs1.13 and Rs1.40 per litre in margins of OMCs and dealers, respectively, to ensure the sustainability of oil supply chain. Ogra's recommendations were reviewed and certain amendments were suggested in a summary. To partially address the financial issues faced by refineries, OMCs and dealers, the Petroleum Division proposed that since petroleum products (Mogas, diesel, kerosene oil and LDO) were exempt from sales tax during the current financial year, the unadjusted sales tax of refineries and OMCs (estimated at Rs34 billion) from July 2024 to June 2025 may be compensated through the inland freight equalisation margin (IFEM). The amount may be recovered over 12 months. It said that for FY26, a 3-5% sales tax on the above-mentioned fuel products may be imposed through the Finance Act. However, if the products remain exempt from sales tax, the unadjusted tax may again be compensated through the IFEM as a fallback option to keep the oil supply chain sustainable. Ogra will develop a mechanism for adjusting GST claims and ensure effective utilisation of digitisation costs, along with implementation timelines, within one month of approval. The full cost of digitisation will be borne by the OMCs across the supply chain, including the retail outlets. The Petroleum Division briefed the ECC that based on those proposals the indicative impact on MS and HSD prices would be Rs1.87 per litre for sales tax adjustment. It was also proposed to increase margins for OMCs by Rs1.13 per litre and for dealers by Rs1.12 per litre. The ECC considered a summary titled "Settlement of financial issues of refineries and OMCs" and agreed that the unadjusted FY25 sales tax of OMCs and refineries may be compensated from May 16, 2025 through the IFEM (which was estimated at Rs34 billion and would be verified by Ogra). The amount will be recovered until the end of FY26. The proposal for the imposition of 3-5% GST on petroleum products shall be considered along with other tax-related proposals for inclusion in the upcoming Finance Bill.
Business Recorder
17-05-2025
- Business
- Business Recorder
POL price adjustment: Ogra's advice disregarded
ISLAMABAD: Consumers see a smaller reduction in high-speed diesel (HSD) prices than initially proposed by the Oil and Gas Regulatory Authority (Ogra). Effective May 16, 2025, the federal government has reduced HSD price by Rs2 per litre, significantly less than Ogra's recommended Rs4.09 per litre decrease. Meanwhile, petrol prices will remain unchanged, as a result of government adjustments to the inland freight equalization margin (IFEM) and exchange rate adjustments, despite OGRA suggesting a Rs1.25 per litre decrease. The federal government adjusted Rs2.09 per litre out of total recommendedRs4.09 per litre decrease in HSD in exchange rate and IFEM on HSD. Avg of platts with incidentals and duty on HSD reduced by Rs4.09 per litre from Rs159.47 per litre on May 1 to Rs155.38 per litre on May 16, 2025. The government allowed exchange rate impact of 84 paisa in the review. The IFEM increased by Rs1.55 per litre from Rs3.33 per litre to Rs4.88 per litre. District margin and dealer margin on HSD was kept unchanged at Rs7.87 per litre and Rs8.64 per litre, whereas, extra margin reduced from 31 paisa to 1 paisa. Avg of platts with incidentals and duty on petrol reduced by Rs1.25 per litre from Rs151.71 per litre on May 1 to Rs150.46 per litre on May 16, 2025. The government allowed exchange rate impact of 1.25 per litre from 0.09 paisa to Rs1.34 per litre in the review. The IFEM remained unchanged at Rs6.30 per litre. Copyright Business Recorder, 2025
Express Tribune
16-05-2025
- Politics
- Express Tribune
LPG safety bill in limbo for past two years
Listen to article Despite losing hundreds of lives in LPG blasts across the country, the law ministry has been reluctant to clear Ogra's LPG Industry Amendment Bill for the last two years, which envisages strict penalties, including imprisonment. The Oil and Gas Regulatory Authority (Ogra) has proposed 10 years of imprisonment along with a Rs10 million fine. Secondly, the regulator has proposed 14 years of imprisonment with Rs15 million fine for those involved in cases of liquefied petroleum gas (LPG) cylinder and browser blast. According to LPG industry officials, they have written letters multiple times to the law ministry, but it has not moved to save the lives of people from substandard LPG cylinders and bowsers. Ogra had submitted a draft bill to the law ministry two years ago, but it is still pending with no progress to date. The LPG Distributors Association of Pakistan, in a letter sent to the prime minister, has said that there is no proper legal framework to ensure safety in the LPG industry. Existing laws carry negligible penalties for illegal practices. In the letter, the LPG Association expressed concern over the continued delay in the Ogra amendment bill by the law ministry and demanded that Minister for Law and Justice Azam Nazeer Tarar take prompt action on the matter. Incidents are occurring frequently due to the mixing of CO2 in LPG and those involved in this hazardous malpractice are being let off without punishment. The association has urged the Ministry of Law and Justice to present the proposed amendments to the bill in parliament, noting that strict penalties have been recommended for those responsible. If the bill is not tabled soon, the association warned it would be compelled to protest. In a video statement, Association Chairman Irfan Khokhar said that two explosions and four fatalities occur every day due to this issue. He noted that more than 36 letters have been sent to government bodies and the Ministry of Law, highlighting the delay in passing the bill. He cited incidents such as the tragic bowser explosion in DG Khan and the casualties from bowser blasts in Hyderabad last year. Khokhar further stated that in recent days five people lost their lives in an LPG explosion in Lahore. "We respectfully urge the immediate approval and implementation of the pending bill regarding petroleum and explosive materials, with a clear and enforceable ban on the manufacture and sale of substandard LPG cylinders, bowsers and valves across Pakistan. The continued operation of illegal and non-compliant manufacturers has led to frequent explosions, severe injuries and tragic loss of life."
