By SKM
June 02, 2025
ISLAMABAD: In a bid to maintain the fuel supply chain intact to ensure energy security without damaging the country’s strategic assets— local refineries, the Oil and Gas Regulatory Authority (OGRA) has carved out a new mechanism under which any party to the dispute — refineries or OMCs on import of POL products, less uplifting of local petroleum products and short local production in violation of decisions taken in the monthly Product Review Meeting (PRM) will face the music in the shape of monetary penalty and suspension of their licenses.
The refineries and PSO have been agitating the issue of short lifting of their petroleum products for a long time which is why their ability to refine the products at the maximum was adversely impacted. So much so, the state-owned company Pakistan State Oil also reached the verge of collapse because of some unscrupulous OMCs that didn’t lift the local product but were found importing POL products in a bid to snatch the market share of PSO by breaching the PRM decisions.
The Gas and Oil (GO), an oil marketing company that has emerged as an unscrupulous entity as the record shows that this company sold petrol of 74000 MT in May and HSD 79000MT, but it lifted the local POL petrol from local refineries just 89 MT against allocation of 14150MT as per PRM decisions. This means GO breached PRM decisions as it just lifted 1 percent local petrol and committed 99 percent short-lifting. Likewise, in the same month of May, GO also lifted 48000MT of high speed diesel against its allocation of 104000 MT showing the shortfall of 54 percent.
The GO that has developed a strong network with some top decision makers of the sitting government and in the recent past, it also wrote a letter to the Prime Minister against OGRA chairman who showed some resistance in allowing GO to import POL products against PRM decisions. However, this time, OGRA came into action and decided to punish OMCs involved in breaching PRM decisions.
The regulator, to this effect, issued a strict warning to refineries or oil marketing companies (OMCs) in plain words saying if failed to accomplish commitments of producing POL products and lifting the local products as per the PRM (Product Review Meeting) would not only be punished through a monetary penalty but their licenses would also be suspended.
This warning has been conveyed by OGRA on May 30, 2025 to the Chief Executive Officers (CEOs) of refineries and over three dozen OMCs, urging strict compliance with commitments made to the oil sector regulator.
According to OGRA, the issue of non-compliance by OMCs in uplifting locally produced fuel and failure by refineries to meet production targets was discussed on May 29, 2025 in detail during the recent Product Review Meeting (PRM). The Authority observed that numerous OMCs did not honor their commitments to procure product from local refineries, as agreed in the PRM.
In the meeting held on May 29, 2025, OMCs which in the month of March 2025, have failed to maintain 20 days stock cover of MS & HSD in compliance of Rule 37 of the Pakistan Oil Rules 2016 will be penalized with a penalty of Rs10 million if they have less than 5 days stock of petrol and HSD. If the OMCs have a stock of POL products with less than 10 days cover but more than 5 days will face a penalty of Rs7.5 million. And those OMCs that have a stock of POL products less than 15 days cover and more than 10 days needs, will face the punishment of RS5 million and those having a stock of less than 20 days cover and more than 15 days cover will be exposed to a penalty of Rs1 million.
However, OMCs that have uplifted insufficient product from refineries, the refineries that have not supplied the products to an OMC as per their allocation and the refineries that have produced products less than the commitment in the Product Review Meeting (PRM) during the month of March-2025 shall be penalized, owing to violation of decisions taken in relative PRM meeting as per the new formula. Under the formula, the OMCs involved in short upliftment of local products by less than 25 percent would face a penalty of Rs1 million and those who will be involved in procuring local POL products less than 50 percent and more than 25 percent will pay Rs5 million as penalty. However, those OMCs involved in less lifting of products more than 50 percent and 75 percent will face a penalty of Rs7.5 million and Rs10 million respectively and the same treatment will be meted out to the refineries if any of them found involved in less production of POL products in breach of PRM decisions.
“This failure to comply with PRM directives is not only disrupting OGRA’s oil supply chain management but is also undermining national energy security and leading to significant revenue losses due to unnecessary imports, which constitutes a violation of the Authority’s directives,” OGRA stated.
The letter of OGRA is addressed to Managing Director PSO, CEO, Allied Petroleum, Lahore, MD, Cnergyico PK, Karachi, MD, Oil Industries, Karachi, Chairman, GO, Lahore, CEO, Eco Gasoline, Islamabad, MD, Parco Gunver Ltd., Lahore. CEO, Echo Oil, Islamabad, CEO, APL, Islamabad, CEO, Petro Pakistan, Lahore, MD, WEL, Karachi, CEO, OTO Pakistan, Lahore, CEO, Hascoi, Karachi, CEO, Oilco Petroleum, Lahore, CEO, Taj Gasoline, Karachi, CEO, Benzin, Lahore, MD, Be Energy, Karachi, CEO, My Petroleum, Lahore, MD, Cnergyico PK, Karachi, MD, Askar Oil Services, Lahore, CEO, Puma Energy, Karachi, MD, PARCO-PEARL, Karachi, MD, Vital Petroleum, Lahore, MD, Max-Fuel, Karachi, CEO, Jinn Petroleum, Islamabad, CEO, Kepler, Karachi, CEO, Flow Petroleum, Lahore, MD, Exceed, Islamabad, CEO, Euro Oil, Lahore, CEO, Khyber Petroleum, Lahore, CEO, Fossil Energy, Karachi, CEO, Lucky Petroleum, Karachi, MD, Zoom Marketing, Lahore, CEO, Pure Petroleum, Lahore, CEO, Fast Oil, Karachi, MD, Alhamdali Intl., Lahore, CEO, Horizon Oil, Lahore, CEO, HG Petro, Lahore, CEO, Hi-Tec Lubricant, Lahore, MD, Best Petroleum, Lahore, MD, Al-Noor Petroleum, Karachi, MD, Zoom Petroleum, Lahore, CEO, LaGuardia, Karachi and CEO, The Fuelers, Lahore. Ends
