AGP to audit fuel PDCs, payments to OMCs

KARACHI: Auditor General of Pakistan (AGP) will audit Price Differential Claims (PDCs) and their payments to oil marketing companies (OMCs) and refineries for freezing fuel prices, The News has learnt on Monday.

The federal government in the last fortnightly revision of petroleum products had announced to hold the prices of main fuels till next budget and pay the PDC between local and international oil prices. The government would give Rs2.28/litre as subsidy on high-speed diesel as the petroleum development levy was slashed further. According to an official Finance Division summary, the ministry will advise AGP to conduct the audit on the basis of record submitted to Oil & Gas Regulatory Authority (OGRA) including the sales tax documents.

“Any overpayment on account of PDC will be recovered by OGRA’, the action plan of the summary suggested. Under the plan, Finance Division will open an assignment account to be operated by PSO and transfer the amount of PDC to this account as per the calculations of OGRA within three days of approval of PDC payment mechanism by Economic Coordination Committee (ECC) of the cabinet. The ECC on Monday approved the proposal. Refineries and OMCs will submit claims of PDC fortnightly based on procurement (import & local refineries) of the petroleum products category wise, supported with relevant documents duly certified by external auditor of OMCs/refineries to OGRA. Refineries and OMCs will subsequently share the sales tax documents with OGRA as soon as submitted with FBR for audit within three days after fortnight.

OGRA will review the claims and PSO will transfer the amount of from assignment account to designated commercial banks of respective OMCs and refineries. Petroleum Division has proposed Rs20 billion initially as supplementary grant for the payment of PDC to the oil marketing companies and refineries to avert any shortage of petroleum products as apprehended by the oil sector. “This amount is meagre, given the situation, as oil prices are surging continuously,” a top executive of a local refinery told The News. He pointed out that international oil prices had surged to $139/bbl on Monday and the estimates been calculated on the rates, when per barrel oil was hovering around $100.

“The monthly consumption of petrol and diesel is $2 billion litres in the country and if prices for last five days are calculated, the PDC comes to Rs40 billion for the fortnight, which will end on March 11, 2022 -when the average price will be determined for the fortnight,” the source said. He said Rs20 billion proposed as supplementary grant would be consumed in one fortnight.

On the other hand, the government side believes it is prepared to manage the situation. “We have resources to adjust PDC, if oil prices go further up in the coming days,” said Muzzamal Aslam, a spokesman to finance minister.