The Economic Advisory Council (EAC) of the prime minister has suggested an increase in petrol prices to Rs 100 a litre with some protection for the motorcyclists through issuance of fleet cards or introduction of fuel stamps system. The EAC also recommended 10 percent increase in diesel prices quarterly to bring down subsidy on it to ease pressure on the economy. Prime Minister Syed Yusuf Raza Gilani had constituted an EAC in May to give him input on economic issues. It readily took the job and recommended a number of measures for correction in the economy. Its recommendations also included fuel, subsidies and their impact on the economy. Sources said the EAC suggested market-based adjustments in the petroleum products prices on quarterly basis. It demanded review of the oil marketing companies profit/ margin. It suggested capping OMCs profit/ margin to put an end to exiting mechanism of proportionate increase with surge in oil product prices in the world market. Under the exiting oil pricing mechanism, the OMCs' profit/ margin increases proportionately with the petroleum product rates going up in the international market. This formula clearly gives undue benefit to the OMCs and put the consumers at the loosing end. Although consumers have been protesting against it since 2002 when the existing formula of oil pricing was put in place by the government on the recommendations of the Ministry of Petroleum and Natural Resources (MP&NR). After six years, the EAC is the highest forum, which has questioned anti-consumers oil pricing formula, and recommended to the government to cap OMCs profit/ margin at the current level. The government has included the EAC's suggestion in the proposed formula and if the Cabinet or any other competent authority approves it, it will give substantial relief to the consumers in the oil prices. The EAC also took strong position on deemed duty the protection granted to the refineries, and suggested to the government to remove deemed duty structure to let the refineries operate on market basis profit/ margin. The EAC was of the view that capping of the OMCs profit/ margin and removal of deemed duty will bring relief for the consumers up to Rs 10 per litre on diesel and petrol prices. Copyright Business Recorder, 2008