August 18, 2008	Monday	Sha'aban 15, 1429

ISLAMABAD, Aug 17: While international oil prices are declining steadily, the government has increased the petroleum development levy (PDL) on petrol and high-octane blending component by 256 per cent and 165 per cent, respectively, and reduced the subsidy on high-speed diesel and kerosene oil by 37 per cent.

Despite windfall profits, oil marketing companies have defaulted on payments to be made to refineries, raising fears of disruptions in oil supplies by next month because of difficulties they were facing to order crude imports, informed sources told Dawn on Sunday.

Some companies have already deferred ordering diesel imports because of the financial crunch, they said.

The sources said the government was holding consultations to ease the refineries’ constraints. This week, it was expected to release about Rs15 billion to the industry on account of petroleum differential claims (PDCs) and allow the refineries to draw down required funds from the special reserve fund to avoid any disruption in the supply chain.

These sources said the total dues payable to the refineries touched Rs28 billion on August 15 and the marketing companies had informed refineries that they were “unable to make payments” as their PDC receivables had touched Rs84 billion. This is despite the fact that monthly PDC amount has decreased from Rs34 billion in July to an estimated Rs12 billion in August owing to a let-up in international market.

According to official documents, the government has fixed the PDL on motor spirit at Rs19.53 per litre, up by 256 per cent (Rs14.04 per litre) from Rs5.49 per litre. The government now collects Rs32.74 per litre, including the PDL, 16 per cent sales tax and inland freight equalisation margin. As such, government’s share in per litre motor spirit has increased by Rs10.87 or 50 per cent from Rs21.87 per litre before August 15. Therefore, the government’s net revenue on motor spirit has reached Rs41 per litre.