The oil sector plunges into the financial crisis

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KARACHI: The country’s oil sector is heading for a severe financial crisis as the government appears to be dragging its feet on paying differential price claims (PDCs) to refineries and petroleum marketing companies (OMCs) against price maintenance stable fuels, officials said Monday.

According to industry industry sources, the government partially paid the PDC amount from 01 to 04 November 2021 when prices remained unchanged for four days. “Companies in the petroleum sector have not fully received the PDCs worth Rs 1.50 billion for these four days in November, while some of them have not received any amount at all,” indicated sources.

According to a letter from Pakistan State Oil (PSO), nearly Rs. amounted to 200 million rupees.

Sources have revealed that the PDC for the last fortnight has been calculated at Rs 31 billion and at the moment it has come out at Rs 36 billion. The PDC on diesel is Rs41.43/litre for this fortnight and on petrol it is Rs24.7/litre, they added.

“The amount of the PDC is accumulating rapidly, but the payments are not accelerating, which is worsening the financial conditions of the oil sector,” said a senior executive at a refinery who had not yet received his share of the payment. Government PDC.

In accordance with the government-approved mechanism, refineries and CMOs will submit PDC applications fortnightly, based on supply (import and local refineries) of the petroleum product category, supported by relevant documents duly certified. by the OMC/refineries external auditor to OGRA.

Refineries and OMCs will then share the sales tax documents with OGRA as soon as they are submitted to the FBR for audit within three days of the fortnight.

OGRA will review the PDCs and the PSOs will transfer the amount from the allotment account to the designated accounts of the commercial banks of the CMOs and respective refineries.

According to industry officials, so far amounts are not being released as per commitment and the political situation in the country is making matters worse for the oil sector. “No one knows when this political crisis will end. All issues, including oil company receivables, are now on the back burner in a rising global oil and fuel market,” the sources said.

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