In a bid to provide relief to the masses by maintaining prices of petroleum products at the same level, the government will bear Price Differential Claim (PDC) of up to Rs34.92 per liter in the prices of products till March 31,2022.
Petroleum Division’s Director General (DG) Imran Ahmed, in a letter dated March 15, 2022, requested Oil and Gas Regulatory Authority (OGRA) to calculate the amount of PDC accordingly for reimbursement to the Oil Marketing Companies (OMCs)/refineries under the procedure approved by the Economic Coordination Committee (ECC) of the cabinet.
According to the letter, the honorable Prime Minister has been pleased to approve maintaining the prices of petroleum products at the level of 1-15th March, 2022 and that the government will bear the PDC of Rs34.92 per litre on high-speed diesel (HSD) and Rs23.43 per litre on petrol till March 31, 2022. Similarly, the government will bear a PDC of Rs26.26 per liter on kerosene oil (SKO), and Rs29.26 per liter on light diesel oil till March 31, 2022.
The procedure for payment of PDC to OMCs/refineries for November 1-4, 2021 and March 1 to June 30, 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.
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, 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.
It is relevant to note that in a bid to absorb the burden of approximately Rs31.73billion worth PDC following the announcement of a relief package by Prime Minister Imran Khan, the Economic Coordination Committee (ECC) on Tuesday approved allocation of Rs12 billion to the oil companies while ECC held on March 7, 2022 had already approved a sum of Rs20 billion along with a procedure for swift payments to oil companies and refineries on account of price differential claims (PDCs) mainly to avoid the shortage of petroleum products in the country. The ECC had also approved the mechanism proposed by the PSO for calculation and payment of PDC on the basis of sales of product instead of procurement.