Pakistan oil industry warns of fuel supply risks after petrol, diesel price cuts

KARACHI, June 24: Oil companies that made billions when prices went up are now protesting as petrol and diesel rates drop. The Oil Companies Advisory Council (OCAC) warned the government on Wednesday that supply could be hit, ARY News reported.

According to reports, OCAC sent an emergency letter to the government. It said unilateral pricing decisions have pushed the industry into a financial crisis. The council demanded petrol price be set in consultation with oil marketing companies.

“If the current policy continues, foreign investors may leave Pakistan,” OCAC wrote. It added that weaker oil firms now face bankruptcy.

The new pricing formula, OCAC claims, has cost oil companies and refineries Rs104 billion. Government decisions have hurt working capital and liquidity badly, it said.

“Putting the burden of public relief on oil companies is unfair and unsustainable,” the council argued. Even with rising costs, the industry kept fuel supplies running across the country, it added.

Refineries also supplied fuel at old rates to the military and Hajj flights in national interest, OCAC said.

Oil marketing companies’ margins haven’t been revised in almost 2.5 years. Unpaid dues of Rs66.7 billion have made financial pressure worse.

OCAC has now asked the Petroleum Minister for an urgent meeting and a fair pricing system. It warned that if the policy isn’t changed, the fuel supply chain could be at risk.

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