Petroleum Division issues policy parameters for pricing of petroleum products

August 26, 2020 (MLN): Petroleum Division, in its letter issued to the Chairman of OGRA and Chief Executive Officer of Oil Companies Advisory Council, has laid out the following policy parameters on the basis of which OMCs and Refineries will determine the ex-refinery prices of Motor Gasoline and High-Speed Diesel, in order to implement ECC’s decision:

• Price to be based on Arab Gulf Platts daily FOB average for the number of days in the pricing period as the base commodity price.
• Premium above Platts, freight and incidentals to be taken as the average of PSO’s procurement for the pricing period, and added to the base commodity average price
• Taxation and Levies to be at applicable rates
• Exchange rate to be used as provisionally available for PSO but to be converted to actual upon the retirement of LC (not later than 60 days from B/L date);, any adjustment to be made as a prior period adjustment as per present practice, already approved by ECC. Other cost components mentioned above may also be adjusted on an actual basis in next fortnight/month
• PSO would arrange long term agreement of MS to avail discounted premium as prevailed in case of HSD with KPC
• In case of non-availability of PSO’s premium/freight or incidentals of the previous fortnight, the PSO’s previous month available incidentals of a fortnight will be applied
• In light of CCoE’s decision regarding import of Euro-V, a policy guideline also conveyed to OGRA by Petroleum Division to arrive at ex-refinery prices of MS and HSD may be followed

The letter further stated that the prices of other petroleum products will be determined under the current practice in vogue on a fortnightly basis effective from September 1, 2020.

 Copyright Mettis Link News