AHMAD AHMADANI ISLAMABAD - The oil marketing companies (OMCs) are pressing the government to call off the decision of fixed margins on petroleum products approved by the Economic Coordination Committee (ECC) of the Cabinet saying it would force them to wind up business in the country. Sources said that one multinational OMC has threatened to shut down business in Pakistan if the government does not withdraw the decision. OMCs want to restore margin in percentage mode, the sources said. The sources said that the Petroleum Ministry had recently held a high-level meeting with OMCs on the issue of fixed margins on petroleum products. OMCs urged the Petroleum Ministry to revert the decision saying fixed margins would not allow them to continue business in country. Secretary Petroleum Imtiaz Qazi said that though the Economic Coordination Committee (ECC) of the Cabinet had taken a decision of fixing margins in light of the Judicial Commissions Report and therefore, could not be reverted. The Judicial Commission led by Bhagwan Das had suggested fixing margins in absolute rupee terms instead of percentage mode, which the Petroleum Ministry had to follow. It is to be noted that ECC had approved fixed margins of OMCs and dealers in absolute rupees terms instead of 3.5 per cent and 4 percent respectively which were implemented from December 1, 2010 as; Rs1.50 per litre petrol, Rs1.72 per litre HOBC (high octane blending component), Rs1.58 per liter kerosene and Rs1.61 per litre light diesel oil for OMCs. The dealers margin was fixed at Rs1.87 per liter on petrol and Rs2.15 per liter on HOBC. Moreover, the Petroleum Ministry implemented the decision from December 1, 2010, which has upset the OMCs and dealers. The government had passed the impact of reducing margins of OMCs and dealers on to the consumers and did not increase oil prices despite witnessing surge in global oil prices. It is relevant to mention that ECC had also allowed the refineries and OMCs fixing their ex-depot prices on a monthly basis. Oil and Gas Regulatory Authority (Ogra) will have no role in notifying oil prices except monitor their profitability. OGRA and ECC will be watchdogs of pricing to ensure transparent mechanism. ECCs decision of deregulated price mechanism has not been implemented so far, the sources maintained. However, oil refineries will also continue charging 7.5 per cent deemed duty, which Judicial Commission had recommended to abolish. It may be mentioned that oil refineries had generated Rs 80 billion on account of 'deemed duty since 2002 to December 2009 to set up plants for upgrading petroleum products. In new oil pricing mechanism, ECC also approved controlled-deregulation of Inland Freight Equalization Margin (IFEM) under which freight charges will vary from one destination to the other. OGRA will notify actual cost of IFEM but OMCs will be free to compete with each other in notified freight cost.