Oil Marketing Companies

Rs 20 billion proposed for paying price differential to Oil Marketing Companies

Oil Marketing Companies

The Petroleum Division and Ministry of Energy has proposed Rs 20 billion initially as supplementary grant for payment of Price Differential Claim (PDC) to the oil marketing companies (OMCs).

The Petroleum Division had forwarded a summary to the Economic Coordination Committee of the federal cabinet to get the approval for the fortnightly reimbursement of Price Differential Claims (PDCs) of Oil Marketing Companies. On Monday, the Committee has approved the summary.

According to the concerned sources, “The Minister for Energy has seen and authorized submission of the summary with subject ‘Reimbursement of Price Differential Claims of Oil Marketing Companies (OMCs) and Refineries’ to the ECC of the cabinet for consideration and approval.”

Read more: Financial crisis of oil marketing companies worsens

As per 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 assignment account to be operated by Pakistan State Oil within three days after the approval of PDC payment mechanism by ECC and the Division will also allocate and transfer budget in the assignment account as estimates provided by the Oil and Gas Regulatory Authority (OGRA).

Within three days of the closure of the fortnight, the Oil Marketing Companies and refineries will submit claims of PDC fortnightly based on the procurement of petroleum products category-wise, supported by the relevant documents, and duly certified by the external auditor of OMCs and refineries to OGRA.

The oil and Gas regulatory Authority will review the claims and forward them to Pakistan State Oil (PSO) and a copy to the finance and petroleum divisions within three days. Then 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.

The Finance Division will advise the Auditor General of Pakistan to conduct an audit of the claims and payment on the basis of the record, submitted to OGRA including the sales tax documents within a week of the close of the financial year and in case, any overpayment was found, same would be recovered by OGRA.

As per sources of the Petroleum Division, a special PDC payment procedure has been adopted in consultation with the industry, OGRA, and Finance Division.

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