ISLAMABAD: Based on current international prices, the price differential claims for Oil Marketing Companies/refineries is projected at Rs63.12 billion for May 16-31, 2022 fortnight, sources in the Finance Ministry said.

Sources said that the Finance Ministry was informed by the Ogra not only about the upward revision in PDCs for the months of May 2022 but also told the Ministry that the PDC is projected to accumulate Rs214 billion for March-May 2022 period.

Giving details, the Ogra stated that the accumulation of PDC has been projected at Rs1.03 billion for March 1-15, 2022, followed by Rs28.44 billion for March 16-31, 2022, Rs31.80 for April 1-15, 2022, and Rs34.94 billion for April 16-30, 2022, whereas, PDC is projected at Rs44.48 billion for May 1-15 and Rs63.12 billion for May 16-31, 2022. Sources in the Finance Ministry said the accumulation of PDC may be greater in June 2022, if the prices of petroleum products were not increased.

Sources in the Finance Ministry said that the OGRA has also informed the ECC that continuously rising trend of oil prices in the international market, the PDC projection, based on current international prices, has been revised upward to Rs118.6 billion from earlier projected at Rs102.2 billion for the month of May 2022.

The meeting was informed that the former prime minister had announced a relief package on 28th February 2022, which included a reduction in the consumer price of Motor Spirit (MS) and High-Speed Diesel (HSD) by Rs10 per litre effective from 1 March 2022 besides a commitment to maintaining the prices stable till the end of the fiscal year.

The prices of petroleum products were anticipated at the level notified prices of 1st March 2022 and owing to this fixation, the rate of petroleum levy and sales tax on both the motor spirit and high-speed diesel was reduced to zero which in turn generated PDC of the oil industry – OMCs and refineries – which is being paid to them by the government as a subsidy.

Initially, Rs100.47 billion were allocated and transferred to the PSO for payment to the OMCs and refineries for the month of March and April 2022 besides, November 1-4, 2021.

For the month of May 2022, the OGRA has revised the projection of the Petroleum Division has proposed that Rs118.60 billion may be allocated through a supplementary grant for disbursement of PDC to OMCs/refineries for the month of May 2022 as per the procedure approved by the ECC of the Cabinet. The ECC has approved Rs55.48 billion for the first fortnight of May 2022 and suggested that allocation for the next fortnight will be considered in consultation with the OGRA at the time of reviewing petroleum products prices for the next fortnight effective from 16th May 2022 as per the approved procedure.

Copyright Business Recorder, 2022