ISLAMABAD: The Oil Companies Advisory Committee (OCAC), representing oil refining and distribution companies, has accused the Oil and Gas Regulatory Authority (OGRA) of favoritism, claiming it has caused market distortions by permitting excessive imports of high-speed diesel (HSD) by a single company.
In a letter to OGRA, the OCAC criticized the regulator’s decision to allow one oil marketing company, Gas & Oil Pakistan Ltd (GO), to import substantial quantities of HSD despite the country already having ample stocks. According to the committee, GO was granted approval to import 15,000 tonnes in June, 15,000 tonnes in July, and 40,000 tonnes in August, with an additional 38,000 tonnes approved for September.
The OCAC argued that these approvals were “unfounded and irresponsible,” especially given that local refineries had adequate HSD production to meet the nation’s needs. The committee warned that such excessive imports, driven by unnecessary approvals, could lead to “unfair market practices” and further strain the country’s foreign exchange reserves.
GO has yet to respond to these allegations, though it indicated that a statement would be forthcoming. The controversy arises amidst broader concerns within the industry, as the OCAC highlighted that current HSD sales have been on a decline due to reduced economic activity and the smuggling of Iranian diesel, further questioning the need for additional imports.
The OCAC also pointed out that refineries had to rent extra storage facilities due to the oversupply, exacerbating financial pressures. The committee emphasized that the decision to prioritize imports over local refinery production not only disrupts the supply chain but also undermines the viability of domestic refineries, especially during a time when economic challenges are mounting.
Story by Kalbe Ali
