KARACHI: The Oil Marketing Association of Pakistan (OMAP) has raised concerns over the Oil and Gas Regulatory Authority’s (Ogra) decision to publish petroleum product prices on a daily basis through its website.
OMAP said the decision was taken without adequate consultation with oil marketing companies (OMCs), fuel dealers and other key stakeholders.According to the association, most OMCs are not fully prepared for the immediate implementation of a daily pricing mechanism. It warned that abrupt enforcement could lead to operational disruptions, financial and cash flow pressures, the need for substantial upgrades to enterprise resource planning (ERP), point-of-sale (POS) and other IT systems, as well as challenges in inventory valuation and stock management.
The association also highlighted potential regulatory and compliance concerns, disputes over dealer margins and pricing adjustments, and broader market uncertainty that could disrupt supply chains and create confusion among consumers.OMAP urged the government and the regulator to adopt a phased implementation approach rather than introducing the system immediately.
It said authorities should first conduct comprehensive consultations with stakeholders, establish a transparent pricing mechanism, issue clear guidelines on inventory valuation, facilitate upgrades to digital systems, clarify tax and accounting procedures, develop a framework for dealer margin adjustments, and introduce detailed standard operating procedures (SOPs) alongside an appropriate regulatory framework.OMAP seeks govt intervention to save emerging OMCs from financial crisis
OMAP has urged the government to take immediate steps to address the worsening financial crisis facing emerging and smaller OMCs, warning that continued inaction could undermine competition, discourage investment, and disrupt the country’s downstream petroleum sector.
In a letter addressed to Minister for Energy (Petroleum Division) Ali Pervaiz Malik, OMAP Chairperson Tariq Wazir Ali highlighted the severe financial pressures confronting smaller OMCs due to stagnant marketing margins, delayed payment of price differential claims (PDCs), and repeated losses resulting from unilateral fuel pricing decisions.
OMAP noted that all licensed OMCs are legally required to maintain minimum fuel stocks. However, frequent revisions to the petroleum pricing formula without prior consultation often reduce the value of those mandatory inventories, leaving emerging companies to absorb significant financial losses.
The association emphasised that OMC marketing margins have remained unchanged since 2023 despite substantial increases in operating expenses, financing costs and regulatory compliance requirements. Unlike larger companies with stronger financial resources, emerging OMCs have limited access to affordable financing and are disproportionately affected by rising business costs.
OMAP further pointed out that approximately Rs66.7 billion in outstanding PDCs owed to its member companies remain unpaid. The prolonged delay in releasing these funds has severely strained the working capital of smaller OMCs, restricting their ability to open letters of credit, finance imports and secure fuel cargoes at a time when international oil prices are increasing.
The association warned that the combined impact of stagnant margins, delayed PDC payments and inventory losses is no longer an isolated business concern but a structural threat to Pakistan’s downstream petroleum industry. It cautioned that if emerging OMCs are forced to reduce operations or exit the market, the country risks reduced competition, fewer consumer choices and diminished investor confidence in the energy sector.
While reaffirming its support for government measures aimed at providing relief to consumers, OMAP stressed that such relief should be funded by the government rather than transferred to an industry already operating under significant financial strain.To ensure the long-term sustainability and competitiveness of the petroleum sector, OMAP has requested the minister’s urgent intervention on these key issues.
