The finance ministry has withheld payments to Oil Marketing Companies (OMCs) for differential on oil prices following the Establishment Division''s objections over the payment process. The Division questioned the signing of payment vouchers by the finance ministry and whether the amount claimed therein were audited or unaudited.
The petroleum ministry had submitted the payment schedule to the finance ministry on November 14 and asked for early payments. The government owed OMCs Rs 32 billion in terms of differential and delay in the payment was making it difficult for the government to continue import of petroleum products and ensure smooth supply to the market.
Two OMCs - Shell and PSO - have been paid Rs 18 billion through local banks consortium and the rest of the payment was to be made by the government itself. The government will pick up liabilities and make payment of the total amount after three years in one go. This is a unique arrangement in its nature that a government, which claims of having sound financial proposition asks banks to pay the OMCs on its behalf and then picks up the financial liabilities as upfront payment.
The sources said the OMCs have been writing to the finance ministry for early payment of their outstanding. They have also conveyed to the ministry that further delay in payments will create serious financial constraints and ultimately force them to cut down buying of import from the international market for ensuring smooth supply in the local market.
The payments are due for the last many months as the government is following the policy of capping oil prices strictly. The OMCs demanded of the government to remove cap on oil prices.
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