KARACHI: The Oil and Gas Regulatory Authority (Ogra) has asked oil marketing companies (OMCs) to submit data for the reimbursement of price differential claims (PDCs) within 10 days.
In a circular issued to OMCs operating in the country, the regulator said that expeditious settlement of PDCs, while ensuring transparency and accuracy, requires evidence-based scrutiny and verification.
It called on OMCs to follow the prescribed mechanism in letter and spirit, emphasising that complete claims, along with all requisite supporting documentation, must be submitted without delay. Ogra noted that such records should be readily available with OMCs as responsible corporate entities maintaining systematic and transparent documentation supported by adequate internal controls.
The regulator said the required data and information, in both hard and soft form, must be submitted within 10 days of the issuance of the letter. Ogra’s move follows complaints from the oil sector over delays in PDC reimbursements, with companies warning that prolonged processing times are straining liquidity and threatening supply chain stability.
Industry participants said delays in disbursements, particularly under the tranche-based payment structure, are exacerbating working capital constraints and could disrupt critical operations such as imports and the opening of letters of credit (LCs), posing risks to the continuity of petroleum product supply in an already volatile global environment.
The industry also raised concerns over revised documentation requirements introduced by Ogra on April 16, describing them as extensive and time-consuming, with the potential to delay reimbursements beyond the previously envisaged two-day timeline.
Additional concerns include persistently low regulated margins, the accumulation of non-adjustable sales tax and continued exposure to exemptions on petroleum products. Companies also pointed to rising operational costs linked to regulatory compliance and digitisation requirements, as well as higher borrowing costs following a policy rate increase to 11.5 per cent. Frequent and selective audits were also cited as adding to financial pressure.
The sector said a simpler and time-bound reimbursement system is needed to maintain financial stability and ensure uninterrupted fuel supply across the country. It called for a return to the streamlined mechanism outlined in Ogra’s March 17 communication.
The industry also urged the immediate release of pending PDC payments to ease liquidity pressures. It proposed retaining only 10 per cent of claims for final settlement, to be released after reconciliation of sales tax returns and petroleum levy receipts.
