ISLAMABAD: Amid Oil Companies Advisory Council (OCAC) demand for removal of price differential claim (PDC) and a subsidy mechanism, the Petroleum Division has asked the Oil and Gas Regulatory Authority (Ogra) to calculate the amount of PDC receivable of Oil Marketing Companies (OMCs)/oil refineries including arrears of November 1-4, 2021 in light of decision of Prime Minister Imran Khan for a subsidy/PDC on High Speed Diesel (HSD) price @ Rs2.28 per liter of OMCs/oil refineries till March 15, 2022.

In a letter to the PD, the OCAC says, “In order to avoid imminent shortage of petroleum products, we request that the PDC element should be removed by revising petroleum product prices immediately or alternatively a subsidy mechanism be founded.”

Sources said that representatives of the OCAC also held meeting with the chairman OGRA and the secretary Petroleum Division who assured the matter would be taken up with Finance Minister Shaukat Tareen for an amicable solution.

In a letter to the Petroleum Division, a copy available to Business Recorder, the OCAC has claimed that the current PDC on HSD will create a receivable of approximately Rs1 billion during the first fortnight of March 2022.

“This will add to the previous receivable of Rs2.6 billion pertaining to November 1-4, 2021 and Rs10 billion pertaining to 2004-2008, thereby, further aggravating the financial challenges being faced by the industry”, the letter added.

The OCAC further urged the decision to maintain prices at the current level till July 2022 will lead further buildup of the PDC for HSD and petrol as the international prices are on a sharp rise due to the current geopolitical situation.

“If the local consumer prices are not aligned with the international market and PDC regime is continued, the industry will not be able to sustain and this will lead to a severe supply chain disruption more so during the upcoming harvesting season resulting into grievous crises of petroleum products shortage similar to what was faced in the June 2020. Further it will have serious adverse impact on the business continuity of a number of companies in the industry,” the letter maintained.

Copyright Business Recorder, 2022