Second half of March: Govt will absorb rise in prices of petrol, diesel

ISLAMABAD: The government will absorb an estimated increase in the High Speed Diesel (HSD) ex-depot price of Rs38.10 per litre and an increase of Rs26.28 per litre in price of petrol for second half of March owing to surge in global oil prices, according to energy experts.

The increase in prices of HSD and petrol will also raise the petroleum differential claims (PDC). The projected PDC on HSD is Rs34.10 per litre and Rs22.28 per litre on petrol and PDC would likely to reach Rs28 billion in second half of March, the experts said.

After Prime Minister Imran Khan’s announcement on February 28 that the government would not raise the prices of petroleum products till June 30, 2022, the government will pay Rs2.28 per litre in PDC, which the Oil Companies Advisory Council (OCAC) had rejected.

On March 1, 2022, OCAC in a letter to the Petroleum Division, stated, “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 Oil and Gas Regulatory Authority (OGRA) and the secretary Petroleum Division who assured the matter would be taken up with Finance Minister Shaukat Tarin for amicable solution.

The OCAC claimed that current PDC on HSD created a receivable of approximately Rs1 billion during the first fortnight of March 2022.

This added 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 Petroleum Division had also asked the OGRA to calculate the amount of the PDC receivable of the 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 HSD price @ Rs2.28 per liter of OMCs/oil refineries till March 15, 2022.

In a statement, Minister for Energy Hammad Azhar said that the country had enough petroleum products stock for one month ahead of the harvesting season.

Copyright Business Recorder, 2022