ECC nods Rs62.27bn for PDCs payment

KARACHI: The Economic Coordination Committee (ECC) of the Cabinet on Saturday approved Rs62.27 billion for the reimbursement of price differential claims (PDCs) submitted by the oil industry on account of cheaper sales of petroleum products during the second fortnight of May.

The approval was given at a meeting of the ECC with Finance Minister Miftah Ismail in chair.

Minister for Industries and Production Makhdoom Syed Murtaza Mehmood, Minister for Religious Affairs and Interfaith Harmony Abdul Shakoor, Minister of State for Finance & Revenue Dr Aisha Ghous Pasha, Minister of State for Petroleum Division Musadik Masood Malik, federal secretaries and senior officers also attended the meeting.

The price differential will be paid to the oil marketing companies (OMCs) and refineries by the government as a subsidy in the wake of a decision to keep the petroleum products' prices fixed at the level notified March 1, 2022 to provide relief to the consumer.

Petroleum Division had sought a supplementary grant of the aforementioned amount for the payment of oil sector PDCs in a summary presented before the ECC.

The government has so far cleared Rs155.9 billion on account of PDCs as it had approved Rs37 billion in March 2022, Rs73 billion in April 2022, and so far Rs46 billion for May 2022.

Out of total Rs155.9 billion, the sanctioned amount stands at Rs20 billion, Rs11.7 billion, Rs40 billion, Rs28.74 billion and Rs55.4 billion.

The grand total balanced amount payable to OMCs stood at Rs444.938 billion till May 15, 2022.

In the said allocated supplementary grant, Rs9.02 billion fell short for the period of March-April 2022 based on the estimation provided by Oil & Gas Regulatory Authority OGRA, therefore, a separate summary was moved on May 17, 2022 for the consideration of the ECC to reimburse PDCs, resulted due to variation in sales volume against the estimated sales, reported by OGRA vide letter dated May 9, 2022.

The OGRA has earlier projected the PDCs for May 16-31, 2022 (2nd fortnight) at Rs72.56 billion for allocation through supplementary grant for the disbursement in accordance with the PDC disbursement mechanism, approved by the ECC of the Cabinet.

Finance Division supported the summary subject to adjustment of the impact of increase in the petroleum product prices by Rs30/litre effective from May 27, 2022.

Accordingly, OGRA furnished a revised projection of Rs62.27 billion for the second fortnight of May 2022.