Oil Price Calculation (real one) - To Show How GOVT and OMC is fooling
pakistanis.
THE OCAC general secretary's letter regarding oil price calculation a is a
classical example of baffling ordinary readers in a maze of technical jargon to
divert attention from the real issue of fixing a fair price of petrol for a
consumer who does not have recourse to
company or government paid fuel.
Unfortunately, the OCAC only represents oil companies whose main aim is
accumulation of profits to fill their coffers at the consumers' expense.
The information below has been gathered from Plats Oil Gram Scan Report and is
presented in simple terms to find out the real price from a consumer's
viewpoint. We will calculate the price of petrol by accepting the OCAC's price
on Sept 5 of $56 per barrel and other inputs as laid down by the OCAC.
One barrel = 42 gallons = 159 liters.
Price of one barrel of crude oil in rupees = $56xRs60 = Rs3360.
Freight premium = $2.16xRs60 = Rs 129.6.
Handling, bank and LC charges and marine insurance @0.9 per cent = Rs302.
Wharfage charges @3.85 per cent = Rs129.36.
Oil companies' margin @3.5 per cent = Rs117.6.
Price of one barrel of oil = Rs3360+129.6+302+129.36+117.6 = Rs4,038.56.
Refining cost @10 per cent = Rs404.
Price of one barrel of refined petrol = Rs4,442.56.
Hence price of one litre of petrol = 4442/159 = Rs27.94 per litre.
Excise duty @Rs 0.88 per litre.
Add 15 per cent GST = Rs4.20 per liter.
Price per liter of petrol = Rs27.94+Rs4.20+0.13ps = Rs33.15.
The government is still pocketing Rs20 per liter of petrol in addition to excise
duty of Rs0.88 per liter and general sales tax L@15 percent. Good governance,
therefore, demands that in all fairness to the consumer, the president and the
prime minister should appoint members from the public on the committee to
balance things out.