Petroleum ministry directs OMCs to submit details of petrol import from China under CPFTA

Islamabad: The ministry of petroleum has directed all Oil Marketing Companies (OMCs) to submit data on the import of petrol from China at zero percent duty under the under China-Pakistan Free Trade Agreement (CPFTA).

The ministry sent a letter to the Oil Companies Advisory Council (OCAC) asking it to provide details about the name of cargo, port origin, quantities in litre, offloading port along with the date of decanting and custom duty paid.

The OMCs can import petrol from China under the CPFTA at zero percent duty while imports from Middle East are subjected to 10 percent duty.

Under the CPFTA renegotiated in 2019 and labeled as CPFTA II, the government had issued statutory regulatory orders on December 31, 2019 that abolished tariffs on import of petrol. As such, there was no customs duty on the import of petrol from China with effect from January 1, 2020.

This results in a price saving of about 10pc on petrol imports from China. However, this price differential is retained by the OMCs as windfall profit instead of its benefit to the exchequer or the consumers.

Depending on the international petrol price published in Platt’s Oilgram, the gap normally works out between Pakistani Rs 9-12 per litre.

“It has been observed that a number of OMCs have imported motor spirit (petrol) from China under the CPFTA,” said the Ministry of Energy in a letter to the OCAC, an umbrella association of about two dozen refineries and oil companies.