KARACHI: The oil industry has urged the Oil and Gas Regulatory Authority (Ogra) to expedite the settlement of outstanding Price Differential Claims (PDC) and restore a simplified reimbursement mechanism, warning that continued delays are straining liquidity and threatening supply chain stability.
In a letter addressed to Ogra’s Member (Finance), the Oil Companies Advisory Council (OCAC) acknowledged the release of the third tranche, amounting to 40 per cent of PDC claims, on April 24, 2026. However, it noted that the overall financial position of oil marketing companies (OMCs) remains under significant strain due to multiple and overlapping pressures.
The sector highlighted persistently low regulated margins, the accumulation of non-adjustable sales tax, and continued exposure to exemptions on petroleum products as key concerns. It also pointed to rising operational costs linked to regulatory compliance and digitisation requirements, alongside increased borrowing costs following a policy rate hike to 11.5 per cent. Frequent and selective audits were also cited as adding to the financial burden.
According to the letter, delays in disbursement, particularly under the tranche-based payment structure, are exacerbating working capital constraints across the industry. This, it warned, could disrupt critical operations such as imports and the opening of letters of credit (LCs), thereby posing risks to the continuity of petroleum product supply in an already volatile global environment.
The industry also expressed concern over revised documentation requirements introduced by Ogra on April 16, stating that these are extensive and time-consuming and could delay reimbursements beyond the previously envisaged two-day timeline.
In view of these challenges, the industry has called for a return to the original, streamlined reimbursement framework outlined in Ogra’s March 17 communication. Alternatively, it proposed a pragmatic approach under which residual discrepancies could be resolved on a case-by-case basis without delaying the release of admissible claims.
Among its key demands, the industry sought the immediate release of remaining PDC amounts to ease liquidity pressures. It also recommended that only 10 per cent of admissible claims be retained for final settlement, to be released after reconciliation of sales tax returns and petroleum levy receipts.
The letter emphasised that a simplified and time-bound reimbursement mechanism is essential to maintaining financial stability within the sector and ensuring uninterrupted fuel supply across the country. delay reimbursements beyond the previously envisaged two-day timeline.
In view of these challenges, the industry has called for a return to the original, streamlined reimbursement framework outlined in Ogra’s March 17 communication. Alternatively, it proposed a pragmatic approach under which residual discrepancies could be resolved on a case-by-case basis without delaying the release of admissible claims.
Among its key demands, the industry sought the immediate release of remaining PDC amounts to ease liquidity pressures. It also recommended that only 10 per cent of admissible claims be retained for final settlement, to be released after reconciliation of sales tax returns and petroleum levy receipts.
The letter emphasised that a simplified and time-bound reimbursement mechanism is essential to maintaining financial stability within the sector and ensuring uninterrupted fuel supply across the country.
