THE new year's petroleum production and exploration policy was announced by the Economic Coordination Committee on Friday at a meeting presided over by Adviser to Prime Minister on Finance Shaukat Tarin, which included, among others, giving incentives to oil companies for exploration, capping purchase price at $100 per barrel for indigenous production and increasing the petroleum price-revision period from 15 to 30 days. These steps are possibly designed to encourage other investors in the market. What is however most important is that the government has raised the profit margin of the oil marketing companies from 3.5 to 4 percent. Likewise the oil dealers have been given their share of the pie as their commission has been increased. Though the government maintains that it is giving up its petroleum development levy and that the burden would not be passed on to the consumers, there are apprehensions in the public mind that this might happen eventually. That would be extremely unfortunate; for its impact on the consumers already under the strain of high inflation would be disastrous. The present decision of the government appears to have been influenced by the pressure it had been subjected to by the petroleum companies, which were not happy with the profit they were making relative to their investment. While the government remained resolute for some time and did not give in the companies caught it unawares: they created an artificial shortage across the country by refusing to sell petrol to the public. Because there was already a crisis brewing in the gas industry the pressure because of its impact on traveling public served the purpose. However, things at present seem to be under control. By addressing the reservations of the oil marketing community, with the ECC simultaneously promising that it would not in any way affect the consumers, the government appears to have struck a balance.