Oil Companies Ask Govt to Reimburse Rs. 10 Billion Price Differential

The Oil Companies Advisory Council (OCAC) in a letter has requested Rs. 10 billion in price differential claims (PDC) on petroleum products that have been pending since 2008.

The council sought repayment of the outstanding amount and requested the Petroleum Division to help with the recovery, reported a national daily.

PDC was imposed between 2004 and 2008, with the industry bearing an Rs. 291 billion subsidy to consumers provided by the government. While the government previously reimbursed Rs. 281 billion, the oil industry is still owed Rs. 10 billion.

The recovery of the outstanding amount has been delayed for over 15 years, according to OCAC, during which time the Pakistani rupee has weakened by approximately 78 percent. The exchange rate in 2008 was Rs. 62.54 per dollar, and Rs. 287.13 as of May 24, 2023.

The Council lamented how the industry has suffered significant losses as a result of the delay in repayment, and urged that the pending amount be reimbursed in the next budget to relieve the sector of additional burdens.

Pertinently, the amount has been pending for many years, with numerous requests to the government left unattended. While the request for reimbursement has been made afresh, industry players have little faith in it to happen.

The previous government capped local petroleum rates in March 2022 before departing in April. Last year, the authorities made partial payments on the Rs. 244 billion accumulated PDC amount. The pending PDC amount from 2008, on the other hand, remains pending to this day.

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