Pakistan government is likely to approve additional fees for oil marketing companies (OMCs) and dealers to digitise supply chain and petrol pumps in a bid to curb fuel smuggling.
The additional fee “will be added to it (petroleum products) in the form of every litre,” said Federal Minister for Petroleum Ali Pervaiz Malik on Friday while talking to the media during his visit to the Sui Southern Gas Company Limited (SSGC).
However, he claimed that approval of the fees would not lead to an increase in fuel prices.
As per details, the digitisation would use radar based technology and digital nozzles, and installation of CCTV cameras to run and monitor the supply chain.
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Malik did not disclose the amount of the additional fee. The background information, however, suggests it may be Rs1.35/litre for OMCs and Rs1.40/litre for dealers (petrol pumps).
The Petroleum ministry is set to send a summary to the Economic Coordination Committee (ECC) in this regard within two months.
The minister stated that his ministry had previously submitted a summary, which contained some issues. The issues were being addressed, he added.
“The cost will be utilised to digitise vehicles transporting oil to pumps and digitise petrol pumps as well to detect and discard the smuggled-in diesel and other petroleum products,” he said.
The minister elaborated that they had registered all the petroleum products nationwide in phase-I.
In the phase-II, lorries and trucks - which transport petroleum products from oil depot to petrol pumps - would be fully digitised over the next two to three-months from 85% at present. In another two months, the nozzles would be fully digitised from 70% at present, he explained.
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“The petrol pumps and supply chain system of the products would get fully digitised within six to 12-month from the time we provide OMCs the required investment and make arrangements for payments and paybacks,” Malik said.
The minister regretted the power producers were not “honouring their commitment to lift the imported gas (RLNG) for electricity generation”, which is apparently causing surge in receivables of the Pakistan State oil (PSO) and piling up circular debt in the gas sector in contradiction to the International Monetary Fund (IMF) recommendation to freeze the debt and reduce it to zero in the time to come.
The ministry might opt to acquire bank loan to reduce the circular debt like power sector was doing, the minister said.
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