News Analysis |
In a positive turn of events for PSO and Shell, the government is likely to allow the two major oil marketing companies (OMCs), to recover two-year-old claims of Rs. 482 million on account of regulatory duty on petrol and high-speed diesel.
However, this will put an additional burden on consumers already reeling from gradually rising petroleum product prices. According to an official at the Federal Board of Revenue, the FBR has supported the recovery plan, but suggests that other OMCs should not be given the go-ahead if they come up with any such claim.
“The impact of these old claims from PSO and Shell will reflect in the monthly revision in petroleum product prices for the consumers, who will bear this additional burden,” the official said. The duty claims have remained unresolved since May 2015 and now the government is planning to compensate the two OMCs.
“PSO is always focused on hiring the best fit for the job. In previous years, PSO has recruited top talent from across the industry in order to fill its critical leadership positions. Nevertheless, all these appointments were in line with the transparent and merit-oriented uniform recruitment system”
The Ministry of Energy (Petroleum Division) has sought approval of the Economic Coordination Committee (ECC) for duty collection through adjustments in petroleum prices.
The FBR imposed 2.5% regulatory duty on imports of high-speed diesel and 2% on petrol and crude oil on April 30th, 2015. After the issuance of a notification in that regard, PSO and Shell paid the duty but they could not recover it from the consumers for May 2015.
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A senior official of the Oil and Gas Regulatory Authority (OGRA) told an online publication that the regulator had estimated net duty claims of Rs. 482 million which included Rs. 356 million for PSO and Rs.125 million for Shell. “PSO and Shell have shared details of the regulatory duty paid by them and request that they should be allowed to recover the arrears,” he said.
The Ministry of Finance, Planning Commission, FBR and OGRA have backed the proposal that says the two OMCs should be allowed to recover arrears of the regulatory duty from the consumers. However, the FBR suggested that other OMCs should not be permitted to recover the duty and in case the levy is withdrawn or reduced, its benefit should be passed on to the consumers.
Shortlisted and selected through a transparent and merit-oriented uniform recruitment system governed through standard PSO policies and procedures,” the company said in a statement in response to a query.
The regulator emphasized that notifications regarding the duty on petroleum products should be issued on time in order to avoid such complications in the future.
While the government seeks to reimburse PSO, the management of Pakistan State Oil has started sending termination letters to around 1,700 employees, who have been employed on daily remuneration and are low-paid, in a bid to prevent them from pursuing a court case for regularization of their services.
In compliance with a court order, PSO recently regularized services of over 200 daily-wage employees who were working in the company’s head office in Karachi.
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According to officials, around 1,700 daily-wage employees, who have been employed from time to time over the years, are currently working in different offices of PSO. Salaries of the daily-wage employees range from Rs. 15,000 to Rs. 50,000 per month. According to officials, the PSO management has offered some employees to sign a contract at a low salary on which they had been hired 15 to 20 years ago. They have not been allowed to apply for permanent employment.
The Ministry of Energy (Petroleum Division) has sought approval of the Economic Coordination Committee (ECC) for duty collection through adjustments in petroleum prices.
“PSO does not follow the provincial quota system. It advocates equal employment opportunities for all eligible candidates who are screened, shortlisted and selected through a transparent and merit-oriented uniform recruitment system governed through standard PSO policies and procedures,” the company said in a statement in response to a query.
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“PSO is always focused on hiring the best fit for the job. In previous years, PSO has recruited top talent from across the industry in order to fill its critical leadership positions. Nevertheless, all these appointments were in line with the transparent and merit-oriented uniform recruitment system”