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ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has convened a meeting to brief and align all the stakeholders with the prescribed format of “Exchange Rate Mechanism” as devised and approved by the federal government in the pricing of petroleum products.

With effect from March 16, 2023, the federal government allowed Pakistan State Oil (PSO) an exchange rate adjustment of Rs24.67 per litre on high-speed diesel (HSD) and Rs6.30 per litre on petrol.

Average of Platts with incidentals and duty on HSD has fixed for March 16, 2023, at Rs219.34 per litre from Rs202.99 per litre and Rs201.65 per litre on petrol from Rs187.21 per litre. Petroleum levy (PL) rate on HSD is Rs45 per litre and Rs50 per litre on petrol for the second half of March 2023.

Some concerns with regard to the exchange rate mechanism raised have already been responded to by the Ogra with the clarification that the calculations of exchange rate adjustments are done on the basis of data provided by PSO with the provision of payment documents, which are scrutinized by the Ogra under federal government policy guidelines, wherein, the exchange rate adjustment impact is covered up to the maximum period of 60 days from the Bill of Landing of PSO and is limited to LC discharge date of PSO.

As per the federal government’s pricing formula, the benchmark for the adjustment of the exchange rate is PSO’s import price and any revision in the price formula is the mandate of the federal government.

The Ministry of Energy (Petroleum Division), Directorate General (Oil), CEOs and CFOs of oil marketing companies including OCAC and OMAP are invited to attend the scheduled meeting.

The Ogra implements the federal government policy guidelines under the Ogra Ordinance. However, in order to bridge the communication gap among stakeholders, the Ogra has arranged a meeting on March 21, 2023 at Islamabad to address the concerns of stakeholders.

The federal government had asked the oil and gas regulator to review the existing formula of exchange rate adjustment on the import of petroleum products.

The existing exchange rate adjustment formula is flawed as it does not accurately adjust the rate of exchange as it is based on PSO exchange rate, oil marketing companies had informed the Minister for Petroleum Dr Musadik Malik in a recent meeting.

Copyright Business Recorder, 2023

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