KARACHI: The Federal Investigation Agency (FIA) has termed the payment mechanism for price differential claims (PDCs) to oil marketing companies (OMCs) “faulty and irrational”, saying it enabled companies to claim compensation on old stock that was unaffected by increases in local refinery prices.
The findings were made in the FIA’s interim report following the launch of Inquiry No 43/2026 by its Anti-Corruption Circle in Karachi. According to the interim report, seen by The News, the practice of awarding PDCs on the basis of sales without accounting for older and cheaper inventories, or procurements made before the price hike, was flawed and suggested possible collusion between officials of the Oil and Gas Regulatory Authority (Ogra) and the Petroleum Division.
The report said that the policy summary proposed by the Petroleum Division, which is responsible for petroleum pricing mechanisms, periodic consumer price revisions and margins for OMCs and dealers, encouraged collusive practices such as hoarding and data manipulation aimed at extracting PDCs from the state.
“This was actively abetted and enabled by Ogra officials under the watch of its Member Oil, through a flawed and inadequate mechanism for the so-called verification of OMC sales,” the report said.
The findings revealed that Ogra did not factor in old and cheaper inventories held by OMCs or imported petroleum products purchased before the price increase while calculating PDCs.The report stated that a more prudent approach would have been to base PDC claims on refinery purchases made by OMCs, as ex-depot prices are calculated using the average Platts formula, which affects local refinery procurements in a rising market. According to the report, the Petroleum Division “defied all rationality” by linking PDCs to sales volumes, allowing OMCs to claim compensation on old stocks unaffected by refinery price increases.
As an example, the report said that two OMCs neither purchased products from local refineries nor imported petroleum products during the first PDC period from March 14 to March 20, 2026. Despite this, the companies reportedly filed claims of Rs15.6 million and Rs15.9 million respectively, both of which were processed and disbursed.
The FIA further alleged that several OMCs claimed PDC amounts substantially higher than the financial impact arising from refinery purchases made during the same period.The report said FIA Karachi was attempting to “fully unravel” the alleged nexus between regulators and violators and identify beneficiaries involved in what it described as “daylight robbery from the national exchequer disguised as a market contingency”.
It added that the interim findings were based on eight days of inquiry proceedings, data analysis, interviews and interrogations before the Sindh High Court suspended the inquiry after an OMC challenged the proceedings in court.
