ISLAMABAD, May 11: Oil companies and refineries have asked the government to release over Rs14 billion arrears it was holding up against petroleum differential claims (PDCs) so as to reduce their losses, it is learnt.

Sources told Dawn on Friday that the PDCs payable by the government had reduced to about Rs4 billion a couple of weeks ago but would pile up to Rs14 billion by May 15.

It is expected that the claims would go up to Rs18 billion by next month if the government fails to make payments.

The PDC is an arrangement under which the oil companies are required to sell petroleum products at a rate lower than imported oil which is normally on the higher side although sizable quantities of oil are produced locally but are linked to international prices.

The consumers are normally made to pay this difference.

Since the government has decided to keep the prices unchanged despite rising international prices in the wake of coming elections, it is required to pick up the difference as subsidy.

The sources said that oil companies were currently holding regular meetings with the ministries of finance and petroleum and natural resources to release their outstanding dues to reduce their financial costs.

The government on the other hand is holding back payments to contain budget deficit.

The PDC arrears had at one time crossed Rs40 billion but were brought down to Rs4 billion by keeping the prices of oil products at higher level to pay for the PDCs.

An amount of Rs38 billion was paid to the oil companies and refineries over the last few years.

The worst victim of non-payment is Pakistan State Oil (PSO) which has to get Rs7.4 billion, followed by Rs3 billion of Shell Pakistan and over Rs1 billion of Caltex.

The sources said that the government was currently picking up Rs5.13 per litre as subsidy in case of diesel.

However, all the remaining products are sold according to international prices.