The government has released rupees two billion price differential claims (PDC) of Oil Marketing Companies (OMCs) to ensure the availabity of the product in the country. Sources revealed to the Business Recorder on Monday that the government had released rupees one billion to Chevron and rupees one billion to small oil marketing companies.
The government still owes Rs 18 billion price differential claims to OMCs. The Pakistan State Oil (PSO) is the major fuel supplier in the country and it has also to recover rupees seven billion PDC from the government. Earlier, the government released Rs 3.6 billion to Pakistan State Oil (PSO) for fresh oil import to ensure the fuel supply in the country through Kapco and Hubco.
The Government had released Rs 6.35 billion to Pakistan Electric Power Company (Pepco) that paid to Kapco and Hubco for released Rs 3.6 billion dues to the PSO for fresh oil import. The government has been giving subsidy on the petroleum products to facilitate the consumers since October 15, 2008 due to higher oil prices in the international market.
The subsidy was automatically abolished on October 15, 2008 due to reduction in global oil prices and the government is still to pay Rs 18 billion pending PDC to OMCs. Sources said that the oil prices the in international market had started rising since 2004 and total volume of the PDC was Rs 290 billion since August 2004 to October 2008. The government has so far paid Rs 272 billion PDC to OMCs and Rs 18 billion PDC was still pending.
The huge volume of subsidy had resulted in budget deficit. Due to such huge volume of PDC, the country had undergone oil shortage several times as OMCs had been claiming that they were not able to place orders due to financial crunch followed by non-payment of PDCs, said the sources. Despite payment to PSO and other OMCs, there are reports that some parts of the country are under the petrol shortage.
When contacted, the OMCs representatives opined they held the dealers responsible for petrol shortage, and added that the country was maintaining the stock of petrol and diesel products for 15 days, but the dealers had stopped taking petroleum products, fearing inventory losses in line with the expected reduction in oil prices from February 1. They said that now the petrol pumps had less stock and some parts of the country were facing shortage of petrol. There were also reports that those pumps that had the stock of oil were fleecing the consumers.