KARACHI: The Oil Companies Advisory Council (OCAC) has raised alarm over critically low fuel demand in the country despite the peak harvesting season, warning that the trend poses risks to the sustainability of the oil sector.
In a letter to Senior Executive Director (OSC) of the Oil and Gas Regulatory Authority (Ogra) Atif Sajjad, the council highlighted an unusual build-up in petroleum stocks alongside a sharp decline in sales.
According to the OCAC, high-speed diesel (HSD) stocks have risen to around 637,000 tonnes, equivalent to 47 days of cover, while motor spirit (MS) stocks stand at 32 days of cover. HSD sales are down 43 per cent from projections, averaging about 13,400 tonnes per day against a planned 23,000 tonnes. Similarly, MS sales have fallen 20 per cent, with actual volumes at roughly 17,700 tonnes per day compared with projected sales of 22,000 tonnes.
The council warned that the widening gap between supply and demand is placing significant pressure on refineries, which are already facing reduced product uplift, down 20 per cent for MS and 27 per cent for HSD. It said the trend could force refineries to cut throughput, despite instructions from the National Coordination and Management Council (NCMC) to increase production.
During a recent Product Review Meeting (PRM) for May 2026, Cnergyico PK Limited said it had been directed to raise throughput to 75,000 barrels per day. However, refinery officials reported that uplift by oil marketing companies (OMCs) remains minimal.
The OCAC also said OMCs are facing severe financial constraints due to delays in the reimbursement of pending price differential claims (PDCs), with some companies yet to receive even the first tranche. This has limited their ability to sustain fuel sales, meet financial obligations to refineries, and retire letters of credit (LCs) for imports.
The council cautioned that continued weak demand could disrupt refinery operations and affect the production of other petroleum products. It also warned of potential knock-on effects on critical infrastructure such as the White Oil Pipeline.
“In the current geopolitical environment, it is critical that refinery operations remain stable,” the letter said, adding that payment delays could also affect the timely settlement of crude oil import bills.
Calling for immediate action, the OCAC urged Ogra to intervene on an urgent basis to stabilise the situation and safeguard the long-term sustainability of the oil industry.
