KARACHI: The oil industry has raised concerns over the Oil and Gas Regulatory Authority’s (Ogra) proposed mechanism for the payment of price differential claims (PDCs), arguing that the process is overly complex and could delay the release of claims worth billions of rupees.
Ogra has proposed a structured framework for disbursing PDC funds to oil marketing companies (OMCs), linking payments to independent audits and verification procedures aimed at ensuring transparency and safeguarding public funds.
The regulator has sought approval for a four-stage payment mechanism covering PDCs arising from the government’s temporary petroleum price stabilisation measures implemented during March and April 2026.
Under the proposed framework, 40 per cent of a verified claim would be released upon submission of prescribed documentation and interim claims. A further 25 per cent would be paid after completion of documentation requirements, while another 25 per cent would be disbursed following audit and verification by auditors appointed by Ogra.
The remaining 10 per cent would be released only after a post-audit by the Auditor General of Pakistan and the resolution of any observations raised by investigative agencies.Ogra said the mechanism had been developed in line with directions from the Ministry of Energy to strengthen internal controls, prevent overpayments and undue delays, and ensure that compensation is limited to verified sales rather than stock holdings.
The regulator has also drafted Terms of Reference (ToRs) for the appointment of an independent chartered accountancy firm to audit, verify and certify PDC claims submitted by OMCs.
Under the proposed ToRs, the audit will include verification of sales volumes, reconciliation of refinery purchases, stock movements, tax payments, banking transactions and supporting documentation, including sales tax returns, invoices, delivery records and customer acknowledgements. Auditors will also independently recalculate PDC amounts to identify any duplicate, unsupported or excessive claims.
The proposed audit will cover claims relating to the three-week period from March 14 to April 2, 2026, when the government kept petroleum product prices unchanged despite sharp fluctuations in international oil markets.
The selected audit firm will be required to complete the assignment within 30 days of the contract award and submit detailed verification reports, including product-wise reconciliations, documentation reviewed, factual findings and any recoverable or rejected claims.
Ogra said the proposed framework was intended to ensure transparency, accountability and the timely settlement of verified claims while protecting public funds through independent verification.
Industry representatives said concerns over the payment mechanism have been raised with Ogra and were also discussed at a recent meeting of a parliamentary standing committee. They argued that the proposed framework can adversely affect the sector’s cash flow and said the issue will be taken up at a meeting between the oil industry and Ogra scheduled for Wednesday.
