KARACHI: The Oil Companies Advisory Council (OCAC) has urged the Ministry of Energy’s Petroleum Division to expedite the long-pending reassessment of Special Freight Areas (SFAs).
In a letter addressed to the Director General Oil at the Petroleum Division, the OCAC said that improvements in road infrastructure have significantly altered transportation routes and may have reduced freight costs recovered from consumers through the Inland Freight Equalisation Margin (IFEM).
The council pointed out that it has repeatedly raised the issue with the Oil and Gas Regulatory Authority (Ogra) and the ministry since 2023. It requested the ministry to facilitate the appointment of an independent consultant at the earliest to conduct a comprehensive reassessment of the SFAs.
According to the OCAC, the existing SFA distances may no longer accurately reflect the prevailing road network, travel distances and transportation conditions. It said the last detailed assessment was conducted approximately three decades ago, making a fresh review necessary.
The council highlighted that around Rs2.82 billion a year is currently recovered through the IFEM for freight relating to SFAs. According to data attached to the letter, between July 2025 and June 2026, the total cost of SFA freight for high-speed diesel (HSD) and motor spirit stood at Rs2.826 billion, covering 422 retail outlets.
The HSD component amounted to around Rs1.444 billion, while motor spirit accounted for approximately Rs1.382 billion. The data covered SFA locations supplied from Shikarpur, Quetta, Mehmood Kot, Chakpirana, Faqirabad, Sihala, Juglot and Chitral.
The OCAC maintained that the basis and distances used to determine SFA freight should be reviewed periodically to ensure that costs ultimately borne by consumers remained justified and reflected prevailing transportation conditions.
The council said OGRA has developed terms of reference for engaging an independent consultant and subsequently published an advertisement on March 28, 2025, for a road survey of primary and secondary freight areas. However, it noted that the exercise has yet to materialise.
The OCAC said a timely and objective reassessment will improve transparency and efficiency in the IFEM mechanism and help prevent avoidable freight costs from being passed on to consumers. It urged the ministry to intervene on a priority basis and expedite the process.
