The Oil Marketing Association of Pakistan (OMAP) has urged the government to implement urgent policy reforms to prevent a potential fuel supply crisis in Pakistan. The association warned that delays in addressing issues with the Price Differential Claims (PDC) mechanism could severely disrupt the downstream petroleum sector.
In letters to Federal Minister for Energy Sardar Awais Ahmad Laghari and the Oil and Gas Regulatory Authority (OGRA) chairman, OMAP Chairman Tariq Wazir Ali described the current situation as “increasingly unsustainable.” He highlighted that frequent price adjustments and the high PDC rates are putting extreme financial pressure on oil marketing companies (OMCs).
OMAP noted that PDC levels have reached Rs78 per litre for petrol and Rs176 per litre for diesel. This has significantly eroded OMC margins, forcing companies to act as financial intermediaries for price stabilization without sufficient support. The association emphasized that small and emerging OMCs face operational risks that could impact fuel availability nationwide.
Frequent and unpredictable weekly price changes have made financial planning, inventory management, and pricing strategies challenging. OMAP recommended returning to a more predictable pricing cycle and ensuring timely reimbursement of PDC claims to reduce uncertainty.
The association also stressed severe cash flow constraints due to short settlement timelines, often within a week. They suggested low-cost financing options and extended payment timelines to up to 15 days through the State Bank of Pakistan to stabilize operations.
OMAP proposed forming a joint legal and policy review committee with government and industry stakeholders. The association warned that failing to act promptly could result in fuel shortages, reduced competition, and negative impacts on agriculture and the wider economy.
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By urging immediate policy adjustments and clear regulatory guidelines, OMAP aims to ensure uninterrupted fuel supply across Pakistan and maintain stability in the downstream petroleum sector.
