LAHORE/KARACHI: The Oil Marketing Association of Pakistan (OMAP) has raised serious concerns over the deviation of local refineries from the product supply commitments agreed during the recent Product Review Meeting (PRM), warning that the situation could disrupt the country’s fuel supply chain if immediate action is not taken.
In a letter addressed to the chairperson of the Oil and Gas Regulatory Authority (Ogra), OMAP Chairperson Tariq Wazir Ali said that the volumes committed by local refineries during the last PRM had been mutually agreed, finalised and locked. Based on these confirmed commitments, most oil marketing companies (OMCs) had planned their supply strategies and refrained from arranging import cargoes, relying instead on the expected refinery allocations.
However, according to OMAP, local refineries have recently introduced a new ‘allocation system’, under which limited quantities of petroleum products are being offered to OMCs based on certain averages rather than the agreed PRM volumes. The association termed this move a clear violation of the commitments made during the meeting.
OMAP pointed out that many OMCs currently do not have immediate import sources available because import planning was not undertaken after the PRM allocations were finalised. At the same time, refineries are reportedly maintaining adequate stock levels but are still supplying significantly reduced quantities to marketing companies.
The association warned that due to the restricted supplies, the mandatory 21-day stock cover maintainedby OMCs is being depleted on a daily basis. While OMAP continues to communicate through various channels that there is no panic and no immediate product shortage in the market, it cautioned that if the situation persists, OMC stock levels could soon reach critical levels.
The association further stated that in case shortages occur at retail outlets or fuel stations are forced to close due to supply disruptions, any legal obligations, liabilities, or cases arising from such shortages should be equally borne by the refineries and the regulator for allowing deviation from the agreed PRM commitments.
OMAP has urged Ogra to immediately intervene and ensure that refineries strictly adhere to the committed PRM supply volumes. The association also called for strict regulatory action, including heavy penalties, against any refinery found violating these commitments.
OMAP expressed hope that prompt action by the regulator would help prevent disruption in the national fuel supply chain and ensure stability in the petroleum products market.
