Pakistan’s oil industry has sought Prime Minister Shehbaz Sharif’s intervention over mounting financial pressures, calling for the immediate release of Rs66 billion in outstanding price differential claims and opposing a proposed tax on windfall inventory gains in the upcoming budget.
In a letter to the prime minister, the Oil Companies Advisory Council, which represents oil marketing companies and refineries, requested an urgent meeting with the leadership of the country’s top oil sector firms to discuss the industry’s growing concerns.
OCAC Chairman Asif Iqbal said the sector was facing severe liquidity constraints due to delayed settlement of claims, rising operating costs, increasing compliance requirements, and policy uncertainty.
According to the industry, around Rs54 billion in price differential claims have already been released, but claims worth approximately Rs66 billion are still pending. The council said these payments relate to compensation for supplying petroleum products to consumers at lower prices during the early days of the US-Iran conflict.
The council urged the Oil and Gas Regulatory Authority to ensure that all remaining verified claims are settled by June 8, saying the delay was putting additional pressure on the cash flows of companies.
The oil sector also raised strong objections to proposals under consideration for taxing inventory gains arising from increases in international oil prices. OCAC argued that if the government plans to tax gains made during periods of rising prices, it should also account for inventory losses when global oil prices fall.
The council said oil marketing companies are already required under existing rules to maintain a mandatory 20-day stock cover, adding that this requirement itself places a financial burden on the industry.
Another major concern highlighted by the council was the issue of marketing margins, which it said have remained unchanged since September 2023 despite inflation and higher operational costs. According to the industry, the failure to revise margins has hurt profitability and limited the sector’s ability to invest in fuel infrastructure.
OCAC called for the introduction of a transparent annual mechanism for revising marketing margins so that companies can better manage rising costs and sustain operations.
The industry also criticised the requirement to install Level-3 fast electric vehicle chargers at fuel stations, describing the move as commercially unviable at a time when electric vehicle adoption in Pakistan remains limited.
It said the high installation cost, lack of supporting infrastructure, and absence of local manufacturing capacity make large-scale deployment of such chargers difficult at this stage.
The council further expressed concern over regulatory conditions linking approvals for new fuel stations to the installation of EV charging facilities. It said the requirement has delayed the opening of completed retail outlets, discouraged fresh investment, and diverted resources away from core fuel infrastructure.
The oil industry has urged the government to address these issues in the coming budget, warning that continued financial strain and policy uncertainty could further weaken the sector’s ability to maintain smooth fuel supply operations.
