ISLAMABAD - Apart from approving the draft of LNG policy, the Economic Coordination Committee (ECC) of the Cabinet Tuesday approved the increase in margin of oil marketing companies (OMCs) and dealers on petrol and diesel. Following the 13.55 per cent raise in gas prices, recently decided by the incumbent government, Pakistanis should get ready to face another blow, as this margin will be included in the prices of petrol and high speed diesel in three phases after the notification of ministry of petroleum and natural resources. One-third of raise will be included from September and 2nd one-thirds portion of this raise will be included in October and the remaining increase in the margin of OMCs and dealers will be added in the prices of petrol and HSD in November this year to press the already hard-pressed economy of the poor, the sources said. The Economic Coordination Committee of the Cabinet which met here Tuesday with Federal Minister for Finance and Economic Affairs, Dr Abdul Hafeez Shaikh, in the chair, has approved three subjects of national importance including Resumption of POL supplies to Ex-Faqirabad, Kotla Jam, Sahiwal and Shershah, Review of Petroleum Product Pricing Formula and Draft LNG policy, 2011. According to the analysts, over burdened masses should get ready to face another hike in the prices of gasoline and HSD because through the decision of increase in margin of OMC and dealers, the government has halted the declining impact of prices in crude oil in international market. However the meeting deferred the decision of imposing levy on CNG and LPG, as petroleum ministry sought to impose levy on Rs 5 per kg on CNG and Rs 10 per kg on LPG. They were of the view that this raise was only to benefit OMCs and dealers to ensure the enhanced kickbacks of political elites. Despite repeated directions of the concerned authorities, these OMCs and dealers found guilty of black marketing and artificial shortages in emergencies and even at the end of every month, they opined. While reviewing the petroleum product pricing formula, the ECC agreed to implement the proposals of ministry of petroleum and natural resources. The OMC margin on petrol has increased by Rs 0.48 per litre price of petrol and it took the margin to Rs 1.98 from Rs 1.51 per litre and 0.41 per cent increase on diesel, which took the margin on diesel to Rs 1.76 from Rs 1.35 per litre. Meanwhile, the dealers margin on petrol has been enhanced by Rs 0.50 and on diesel by Rs 0.70. The ECC further directed to apply the proposals in three phases in order to avoid any political pressure in the face of rising trend of commodities in the month of Ramazan. After a lengthy deliberation of the proposals put forward by ministry of petroleum and natural resources, the committee has approved the resumption of POL supplies to Faqirabad, Kotla Jam, Sahiwal and Shershah. The ministry of petroleum and natural resources had proposed that abandoned depots of PSO in Faqirabad, Kotal Jam, Sahiwal and Shershah might be reopened under the Inland Freight Equalisation Mechanism (IFEM). Other OMCs will also be allowed IFEM from these locations as and when they open their storages at these locations. The petroleum products storage of these depots has strategic importance and inclusion in the IFEM mechanism would bring relief to the consumers of upcountry and help avoid recurrence of product shortage. In order to further facilitate the potential investors in LNG sector, by bringing more clarity and predictability for investors, the ministry for petroleum and natural resources had suggested the Oil and Gas Regulatory Authority (OGRA) to propose amendments in the LNG Policy, 2006 on the basis of their experience and the bottlenecks pointed out by the potential investors during various interactions with OGRA. The Draft of LNG Policy, 2011, which is a revision of LNG policy 2006, was presented to the committee and nine out of the ten proposals in the LNG policy draft were approved. According to the approved LNG policy draft, the conditionality of having long-term supply agreement/commitment as well as availability of sufficient natural gas reserves for minimum twenty years has been abolished. Meanwhile, prior permission of government for Spot purchase of LNG will no more be required. Similarly, in approved policy draft, SSGCL/SNGPL will not sell gas priced under weighted average cost of gas mechanism, to industries, which are selected by government to use RLNG from time to time. Other important points of the approved policy draft included a new clause, requiring licensees to furnish guarantee against its delivery commitment, it has also been provided that in case of failure of the licensee to deliver LNG by stipulated date, its first right to 3rd Party Access will stand waived off. The clause related to involvement of Coast Guards or any other agency to control activities of entry and exit of shipping traffic and requirement of security escort through coast Guards at the expense of LNG developer, LNG Terminal Owner/Operator and LNG Buyer has been deleted. Port authorities have been obligated to convey their decision on acceptance of site within one month of submittal of NOC from Singh Environmental protection Agency, Quantitative Risk Assessment Study and Navigational Simulation Study. OGRAs discretionary rights to grant exemptions from mandatory Regulated Third Part Access or Negotiated Third Party Access requirements have been deleted. The project proponents have been allowed to establish gas storage facility subject to applicable rules and OGRA has been mandated to determine storage tariff. The committee will take up the tariff rationalisation in the next meeting giving maximum time for discussion and all the stakeholders may have their time to come well prepared. Ministers for petroleum, law and justice, railways, secretary petroleum, secretary finance, chairman FBR deputy chairman planning commission, governor SBP and all others high officials of related departments were present in the meeting. When contacted, Secretary Ministry of Petroleum and Natural Resources Ijaz Chaudhry said that since this revised pricing formula of petroleum products had been decided by the ECC, the Ministry had been working on it and it was likely that one thirds portion of this raise of the margins of OMCs and dealers would be notified before the upcoming month of September and it would be included in the prices of petrol and HSD by September. He further said this total raise would be added in the prices of petrol and HSD in three phases.