The federal government will meet executives of oil refineries and oil marketing companies on Tuesday after the Oil Companies Advisory Council warned that policy-driven losses are threatening the sustainability of Pakistan’s downstream petroleum sector.
Petroleum Minister Ali Pervaiz Malik will chair the meeting following concerns raised by the OCAC, which represents refineries and oil marketing companies. In a letter to the minister, the industry body sought urgent intervention, warning of an “imminent collapse” of the sector due to unilateral pricing decisions and mounting financial pressures.
The OCAC said the recent reduction in petroleum prices under a revised pricing mechanism had exposed the industry to losses of about Rs. 104 billion. According to the council, companies are currently holding inventories of around 505,000 metric tonnes of petrol and 655,000 metric tonnes of high-speed diesel.
The industry body argued that the losses stem from government pricing decisions rather than operational inefficiencies or market competition. It said repeated interventions without consultation are eroding working capital, liquidity, and investor confidence.
The council noted that oil marketing company margins have remained unchanged since September 2023 despite higher inflation, increasing operating costs, and stricter compliance requirements. It also highlighted outstanding Price Differential Claim payments of nearly Rs. 66.7 billion, which it said are worsening liquidity constraints.
The OCAC urged the government to adopt a transparent and consultative pricing framework, introduce safeguards against abrupt inventory losses, and take steps to restore investor confidence.
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