New policy raises oil companies profit

ISLAMABAD - Economic Coordination Committee of the Cabinet here on Friday approved 2009 Petroleum Production and Exploration Policy besides approving changes in dealers commission, oil marketing companies’ profit margins and pricing review from fortnightly to monthly basis.
“The government would be giving up from its petroleum development levy, the impact of the increase in dealers and oil marketing companies profits and no burden would be passed on the consumers,” Secretaries of Petroleum and Information told media whiling briefing on the ECC meeting.
The ECC that met with Prime Minister’s Advisor on Finance Shaukat Tarin in chair approved two summaries from the Petroleum Ministry separately seeking approvals to the new petroleum policy 2009, and changes in the periodical pricing review as well as intermediaries’ profit margins.
Petroleum Policy 2009 has capped purchase-price at $100 a barrel or equivalent for indigenous production of oil and gas both by private and state-owned companies. Until 2006 wellhead price of oil and gas was capped at $36 a barrel or equivalent unit while former Prime Minister Shaukat Tarin had removed it in 2007. Now the new petroleum policy has again capped the local production at $100 a barrel that according to an official would be great incentive for the exploration companies.
The new policy has also made bidding processes easy and transparent.
On the side of petroleum products pricing and review mechanism, the ECC has approved capping of dealers and oil marketing companies profit margins between the lowest and highest slabs of $45 a barrel and $80.