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ISLAMABAD: The Ministry of Energy was informed by the Oil and Gas Regulatory Authority (OGRA) that there was a shortfall of Rs1.87 billion in price differential claim (PDC), provided through a supplementary grant, for the month of March 2022.

Sources in the Finance Ministry said that the Economic Coordination Committee (ECC) of the cabinet on April 19, 2022 was informed by the Ministry of Energy that the persistent increase in oil prices in the international market since September 2020 led to a substantial increase in the consumer prices of petroleum products in the country.

The former prime minister announced a relief package on February 28, 2022, for a reduction in the consumer price of MS and HSD by Rs10 per litre with the decision to maintain the prices at the existing level till the end of the fiscal year.

Price differential claims of OMCs/refineries: Rs68.81bn supplementary grant approved by ECC

The meeting was further told that in order to implement the package, petroleum products were anticipated at the notified level of March 1, 2022, and due to this fixation, the rate of petroleum levy, and sales tax on motor spirit and high-speed diesel have been brought down to zero percent.

The PDC of oil marketing companies and refineries was estimated at Rs32.07 billion for the month of March 2022 including the PDC of the earlier period from 1-4 November 2021. The price differential is to be paid to the oil marketing companies/ refineries by the government as a subsidy.

However, the OGRA vide a letter dated 18th April 2022 projected the PDC for the first and second fortnight of April 2022 and informed the Ministry of Energy that the amount of the PDC provided through a supplementary grant for the month of March 2022 has fallen short by Rs1.87 billion.

The present government has also approved a Rs69 billion supplementary grant for payment of PDC for the first and second fortnights of April 2022 –Rs31.80 billion and Rs34.94 billion respectively – and Rs1.87 billion shortfall for the month of March 2022.

Copyright Business Recorder, 2022

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