ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet, being met today (Tuesday), is likely to uphold a decision made by the previous government whereby it had allowed the Pak Arab Refinery Limited (Parco) to charge freight on High Speed Diesel (HSD), increasing its price by Rs0.18 per litre.
It is to be noted that the Byco refinery has already approached the Competition Commission of Pakistan (CCP) against discriminatory treatment of Inland Freight Equalisation Margin (IFEM) incentives to refineries. The Byco has cited the examples of Parco and Attock Refinery which have been allowed charge IFEM.
However, the Oil and Gas Regulatory Authority (Ogra) had not implemented the decision of the previous government, contending that Parco had already earned hefty profits a as result of incentives offered by the federal government. The regulator had recommended that the decision regarding freight charging on HSD by Parco should be deferred until the complete deregulation of upstream and midstream sector.
The regulator elaborated that the estimated annual impact of crude transportation reimbursement on HSD will be Rs1.26 billion and per litre incidence on the HSD price will be Rs0.18 per litre. Existing annual crude reimbursement on Motor Spirit (MS) and Light Diesel Oil (LDO) is Rs945.37 million.
