Diesel inventories at 12 of Pakistan’s 20 oil marketing companies (OMCs) have fallen below the required 20-day supply cover, raising concerns about fuel availability as companies delay purchases amid expectations of another change in diesel prices.
Several OMCs are now holding stocks covering only a few days of demand, with some companies reporting single-digit supply levels. Industry officials say the decline is primarily linked to pricing uncertainty, rather than an immediate shortage of diesel in the wider supply chain.
Companies are reportedly concerned that purchasing expensive diesel stocks now could expose them to losses if the government reduces the price of high-speed diesel (HSD) in the next pricing cycle.
Several OMCs Have Critically Low Stocks
Stock levels at a number of oil marketing companies have fallen significantly below the 20-day benchmark.
My Petroleum currently has only one day of diesel cover, while Vital has two days and Echo has three days.
Other companies with stocks below the required level include Taj, with six days of cover, Euro with seven days, and Hascol and Horizon, each with eight days.
GO has nine days of stock, followed by Flow with 10 days and Allied with 11 days.
Meanwhile, ZMOPL and Hi-Tech each have 16 days of diesel cover.
The figures highlight the uneven inventory position across the country’s OMC sector, with a majority of the companies now below the benchmark.
Eight Companies Remain Above Benchmark
While 12 OMCs have fallen below the required supply level, eight companies continue to maintain stocks above the 20-day benchmark.
Wafi has the highest inventory level at 31 days of supply, followed by BE with 28 days.
Pakistan State Oil (PSO) has 26 days of stock, while Parco, Gunvor and Jinn each have 24 days.
Puma is holding 23 days of supply, while Attock has 22 days.
Cnergyico, formerly known as Byco, has 21 days of diesel inventory, placing it just above the required benchmark.
The wide difference between companies indicates that the current inventory pressure is particularly severe among smaller and financially constrained market players.
Price Uncertainty Discourages Diesel Purchases
Industry officials have attributed the declining inventories primarily to uncertainty surrounding the upcoming fuel pricing cycle.
OMCs face the risk of purchasing diesel at prevailing high prices and then being forced to sell that inventory at a lower government-controlled price if HSD rates are reduced.
Such a scenario could result in inventory losses for companies, encouraging them to delay or limit fresh purchases until there is greater clarity over the next pricing decision.
The situation has prompted the Oil Companies Advisory Council (OCAC) to raise concerns with the petroleum minister.
The industry is seeking a more predictable pricing mechanism that would allow both OMCs and refineries to plan purchases and maintain adequate inventory levels without facing significant losses from sudden pricing changes.
Liquidity Problems Add to Pressure
The inventory situation has also been aggravated by liquidity constraints within parts of the oil marketing sector.
Industry representatives have pointed to delayed price differential claims pending with the Oil and Gas Regulatory Authority (OGRA) as another factor affecting companies’ working capital.
Smaller OMCs are particularly vulnerable because blocked funds can increase financing costs and restrict their ability to purchase additional fuel.
Companies must also consider the financial risk of carrying high-priced diesel stocks when there is uncertainty over the price at which those stocks will eventually be sold.
This combination of limited liquidity, financing costs and pricing uncertainty has made inventory management more difficult for some market participants.
Industry Warns of Supply Chain Risks
Oil industry representatives have warned that continued low inventory levels could create additional pressure on the country’s fuel supply chain.
They stressed that the issue is not currently being attributed to a lack of diesel in the broader supply system. Instead, companies are becoming increasingly cautious about purchasing new stocks because of uncertainty over the next price adjustment.
If the trend continues, however, persistently low inventories could increase supply risks, particularly among companies already operating with limited financial flexibility.
The industry has therefore called for greater stability in the pricing mechanism and faster resolution of outstanding claims.
Government Faces Pricing Challenge
The situation presents a challenge for policymakers as they balance consumer fuel prices with the financial sustainability of companies involved in importing, refining and distributing petroleum products.
Any reduction in HSD prices could provide relief to consumers and reduce transportation costs, but OMCs holding expensive inventories could face financial losses.
On the other hand, maintaining adequate stocks requires companies to continue purchasing fuel even when future prices remain uncertain.
Industry officials believe a predictable pricing framework is essential to avoid a situation in which expectations of lower prices discourage purchases and gradually reduce available inventories.
Diesel Market Under Close Watch
With 12 OMCs now below the 20-day supply benchmark, developments in the diesel market are likely to remain closely monitored ahead of the next pricing cycle.
The industry’s concerns over inventory levels, delayed claims and liquidity constraints could become more significant if companies continue postponing purchases.
Authorities and industry representatives will need to address the underlying pricing and cash-flow issues to ensure that low inventories do not develop into broader supply chain disruptions.
For now, the sharp difference between companies above and below the 20-day benchmark underscores the pressure facing parts of Pakistan’s oil marketing sector as firms await greater clarity on diesel prices.
Also read: Petrol, Diesel Prices Remain Unchanged Until Monday
