The Economic Coordination Committee (ECC) has allowed reimbursement of the Price Differential Claims (PDCs) of Oil Marketing Companies (OMCs) and refineries on the sale instead of procurement of the petroleum products.
ECC on Tuesday approved a mechanism under which the Price Differential Claims (PDCs) of Oil Marketing Companies (OMCs) and refineries will be applicable on the sale instead of procurement of the petroleum products.
According to the ECC decision, ECC has considered a summary dated 7th March, 2022 submitted by the petroleum division regarding reimbursement of PDCs of OMCs/refineries and approved the proposal as contained at para 6,7, & 8 of the summary with the stipulation that the words ‘their external auditors’ may be added before the words “ chartered accountant’.
According to sources, the petroleum division in its revised summary advocated that the PDC should be applicable on the sale of petroleum products rather than on procurement of products. Moreover, the details of PDC disbursed to OMCs/refineries should be submitted by OGRA to the ECC through petroleum division along with estimated demand of PDC for next fortnight.
The ECC was further requested to allocate an amount of additional Rs11.73 billion through supplementary grant to meet the expenditure on payment of PDC up to March 31, 2022,
Earlier, ECC of the Cabinet on 7th March, 2022 approved the procedure for making PDC payment to OMCs and refineries. Similarly, the ECC approved a special PDC payment procedure to pay the PDC speedily, and approved opening of a special Assignment Account with Pakistan State Oil (PSO) for drawl of PDC by PSO for its own claims and issuance of PDC claims to the other OMCs/refineries. Furthermore, ECC has also approved, initially a provision of Rs 20 billion through a supplementary grant for making payments pertaining to the period of November (1-4), 2021 and current month, swiftly to OMCs/refineries to avoid shortage of petroleum products in the country with the approval that proposals for further supplementary grants, if any, will be submitted to the ECC, subsequently, in accordance with the anticipated requirements, as and when required.
According to available copy of the procedure for payment of PDC for November 1-4, 2021 and March 1st to 30th June, 2022, the finance division will provide permission to open an assignment account to be operated by Pakistan State Oil (PSO) within three days after the approval of PDC payment mechanism by ECC while the division will also allocate and transfer budget in the assignment account as estimates provided by the Oil and Gas Regulatory Authority.
Similarly, within three days of close of fortnight, the Oil Marketing Companies (OMCs) and refineries will submit claims of PDC fortnightly based on the procurement (import and local refineries) of the petroleum products category wise supported with relevant documents duly certified by the external auditor of the OMCs and refineries to OGRA. In addition, refineries and OMCs will subsequently share the sales tax documents with OGRA as soon as these are submitted to FBR for the purpose of audit.
Likewise, OGRA will review the claims and forward to PSO and a copy to the finance and petroleum division within three days of receipt of claims.
Moreover, the PSO will transfer the amount from the assignment account to the designated commercial bank account of the respective OMCs and refineries and keep an auditable record within one day.
Furthermore, the finance division will advise Auditor General of Pakistan (AGP) to conduct audit of the claims and disbursement at the end of scheme on the basis of the record submitted to OGRA including the sales tax documents within a week of the close of financial year while any overpayment pointed will be recovered by OGRA.
