LAHORE: The Oil Marketing Association of Pakistan (OMAP) has appealed to Prime Minister Shehbaz Sharif to urgently address critical challenges threatening the petroleum sector’s stability and survival.
In a letter to the PM, OMAP Chairman Tariq Wazir emphasized the dire state of the industry, citing prolonged inaction on key issues. He warned that the neglect of oil marketing companies (OMCs), especially emerging players, jeopardizes competition, innovation, and energy security. “The petroleum sector is the backbone of Pakistan’s economy, and its collapse would have catastrophic consequences for energy security and economic stability,” he wrote.
Central to OMAP’s demands is a revision of OMC margins, overdue since July 2024. Rising operational costs and stagnant margins have undermined the financial health of companies, hampering their ability to ensure uninterrupted services. Wazir urged the Oil and Gas Regulatory Authority (OGRA) to review and adjust margins in line with market dynamics.
Additionally, Wazir highlighted severe liquidity issues stemming from the zero-rated sales tax policy on petroleum products, resulting in Rs65 billion in frozen funds. These policies, coupled with delays in tax refunds and unrecoverable freight and capital goods taxes, have left smaller OMCs struggling to sustain operations.
The letter also addressed foreign exchange losses linked to fuel imports, which have disrupted cash flow and supply chain stability. Despite acknowledgment by the Ministry of Energy and OGRA, reimbursement delays continue to burden the sector.
OMAP has called for a meeting with PM Sharif to propose comprehensive solutions and avert further destabilization of this critical industry. “Immediate action is essential to safeguard the sector and maintain Pakistan’s energy security,” Wazir concluded.
