By SKM
December 24, 2025
ISLAMABAD: Pakistan’s major oil refineries have raised concerns over the Oil and Gas Regulatory Authority’s (OGRA) handling of the recent Product Review Meeting (PRM), warning that regulatory ambiguity—particularly regarding High-Speed Diesel (HSD) upliftment—is disrupting supply planning and market stability.
The refineries have also urged the government to shift from the current fortnightly pricing mechanism to a weekly pricing system, arguing that this would better reflect international price movements, reduce pricing lags, and allow more efficient supply planning across the downstream sector.
In a joint letter to the OGRA chairman, copied to the Federal Minister for Energy (Petroleum Division), Secretary Petroleum Division, and the Director General (Oil), chief executives of PARCO, Attock Refinery, Cnergyico PK, National Refinery, and Pakistan Refinery expressed dissatisfaction over the PRM held on December 22. According to the letter, the meeting ended abruptly without clear conclusions, leaving key matters—including guidance on HSD upliftment by Oil Marketing Companies (OMCs)—unresolved.
The refineries warned that the absence of clear regulatory direction has created uncertainty in diesel sales arrangements for current and upcoming months, complicating production planning, inventory management, and dispatch scheduling. Industry sources noted that such ambiguity is especially problematic during periods of declining international prices, when OMCs slow upliftment, causing inventory build-ups at refinery storage facilities.
Refineries also highlighted a structural imbalance in the regulatory framework. While supply obligations are enforced consistently across pricing cycles, upliftment mechanisms do not adjust to changing market conditions. They argued that if diesel upliftment is constrained during price drops, mandatory supply obligations should also be reviewed during upward price trends to maintain market balance.
A key concern raised in the letter relates to jet fuel imports. Refineries urged OGRA not to link or commingle jet fuel with HSD cargoes when diesel imports are unnecessary due to excess domestic supply. They emphasized that jet fuel serves a niche market and should be imported based solely on its own demand and supply dynamics.
Executives warned that commingling jet fuel with HSD during diesel gluts intensifies inventory pressures and undermines effective supply planning. They also noted distortions in domestic jet fuel pricing, which often falls below international benchmarks when imports are restricted, making Jet A-1 production commercially unviable—especially as refineries already face losses on furnace oil exports.
To resolve these issues, the refineries called on OGRA to issue clear post-PRM guidance, provide explicit directions on HSD upliftment, avoid unnecessary jet fuel commingling, align jet fuel prices with international benchmarks, and adopt a weekly pricing mechanism to reduce distortions and market inefficiencies.
Despite multiple meetings and extensive correspondence, the refineries expressed frustration over the lack of regulatory progress. By escalating the issue to the Petroleum Ministry, they signaled growing pressure on regulators to intervene decisively and stabilize refinery operations, ensuring orderly functioning of the downstream petroleum market. Ends
