ISLAMABAD/KARACHI: The Oil Companies Advisory Council (OCAC) has urged the Oil and Gas Regulatory Authority (Ogra) to reconsider its proposal to withhold 10 per cent of admissible Price Differential Claims (PDC) at disbursement, warning the move could intensify liquidity pressures and disrupt fuel supplies.
In communications with the regulator, the OCAC said the plan to retain 10 per cent of PDC payments until cross-verification with the Federal Board of Revenue (FBR) is completed would lock up significant funds at a time when companies are already operating under tight financial conditions.
The withheld amount is expected to be released within two months after verification of sales tax returns and petroleum levy payments. The mechanism, discussed in a meeting of the Inland Freight Equalisation Margin (IFEM) and reportedly endorsed by the Ministry of Energy (Petroleum Division), aims to improve transparency in the petroleum supply chain.
However, the OCAC said the measure deviates from the framework introduced in March 2026, which provided for reimbursement of audited claims within defined timelines.The council estimated that, against an initial claim tranche of Rs27 billion, the withholding would amount to about Rs2.7 billion. With a second tranche of around Rs47 billion expected, the cumulative withheld amount could rise to nearly Rs7.4 billion.
Industry representatives said the additional withholding would compound existing financial strain, as oil marketing companies (OMCs) are already financing price differentials upfront while dealing with constrained banking limits, disrupted cash flows and regulated margins unchanged since September 2023.They warned that prolonged liquidity pressures could affect operational continuity, particularly for small and mid-sized firms, and potentially disrupt fuel supply across the country.
The OCAC also raised concerns over additional audit requirements, including directives for monthly third-party verification of stock and inventory by PricewaterhouseCoopers (PwC). The directive, issued on instructions from the prime minister through the Petroleum Division, requires consolidated audit reports to be submitted within one week of each month’s close.
While supporting transparency initiatives, the council said the audit requirement was introduced with limited notice and without a detailed implementation framework. It called for clear terms of reference outlining scope, methodology and reporting requirements.
The restriction to a single audit firm could create operational bottlenecks given the nationwide scale of storage and distribution, the OCAC said, proposing that multiple top-tier firms be allowed to participate and that implementation be phased.
The council noted that the PDC reimbursement mechanism introduced in 2022 had functioned effectively, ensuring timely settlement of claims. It warned that tighter verification requirements, delayed payments and higher compliance costs could destabilise the sector.
The OCAC reiterated its willingness to work with regulators to enhance transparency but urged a balanced approach that safeguards both oversight objectives and the financial sustainability of the industry.
