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| OMCs may soon get PDC worth Rs70bn |
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Thursday, June 26, 2008
By Aftab Maken
ISLAMABAD: The government is arranging two tranches of Rs35 billion each for the payment of price differential claims (PDC) to oil marketing companies (OMCs) and refineries, said a government official on Wednesday.
The ministry of finance has conveyed to the ministry of petroleum that it will very soon release two tranches of Rs35 billion each to the oil marketing companies and refineries under the head of price differential claims, Ministry of Petroleum Secretary Zafar Mehmud told The News.
The PDC is a subsidy on POL products not passed on to consumers in fortnightly price revisions, but borne by the government to offset the effects of soaring petroleum prices. The PDC claims stood at Rs72 billion before the announcement of the federal budget earlier this month.
“The payment of PDC to the OMCs and refineries will be made either this week or in the first week of July,” Zafar said.
After clearing three tanches of PDC totalling Rs55 billion to the OMCs and refineries the remaining Rs17 billion would also be cleared at appropriate time, as the government is aware of the financial position of the OMCs and refineries, secretary petroleum said.
The government released Rs20 billion under the head of PDCs to the OMCs and refineries last week, Zafar further hoped that the federal government would clear all outstanding amounts of the said OMCs and refineries before the start of new fiscal year.
For the outgoing fiscal year of 2007-08, the federal government has allocated Rs15 billion for PDC (subsidies on POL) that reached to Rs175 billion because of all time high POL prices in the international market crossing the level of $135 per barrel. For the fiscal year 2008-09, the government has allocated Rs140 billion to shield its masses from affects of high POL prices.
The release of said PDC to Shell Pakistan Limited (SPL) will definitely help the company improve its operation, spokesman of the company Abid Ibrahim told The News.
Last week the government released Rs20 billion, he said adding that the company now has Rs11 billion outstanding against Government of Pakistan under the head of PDC and it is expecting release of Rs3 billion next week.
Currently, the government is giving a subsidy of Rs7.15 on petrol, Rs4.37 on HOBC, Rs44.11 on kerosene and Rs33.65 on light diesel oil and has capped the prices of the POL till June 30 to off set the affects of the soaring POL prices to its consumers.
The PPP led government has made commitment with international donors like the World Bank and International Monitory Fund (IMF) to cease the subsidies on POL products, electricity and gas before December 2008 to control its swelling budgetary deficit.
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ISSN 1563-9479 
