OGRA Urged to Convene Meeting on ‘Take or Pay’ Clause
Islamabad: Pakistan’s five refineries have requested the Oil and Gas Regulatory Authority (OGRA) to convene a joint meeting with oil marketing companies (OMCs) to discuss and agree on the ‘take or pay’ clause in sales purchase agreements (SPAs).
In a letter signed by the Managing Directors of Pak-Arab Refinery Company Limited (PARCO), Pakistan Refinery Limited (PRL), National Refinery Limited (NRL), Cnergyico PK Limited (CPL), and Attock Refinery Limited (ARL), the refineries emphasized the need for a mutually agreed-upon implementation mechanism to address uplifting issues.
The refineries appreciated OGRA’s suggestion to amend supply agreements with OMCs to incorporate a binding ‘take or pay’ clause. However, they stressed that OGRA, as the regulator, needs to ensure the application of its rules and standard operating procedures (SOPs) to prioritize local production.
The refineries also raised concerns about the challenges in product off-take resulting from OMCs’ failure to uplift committed quantities of high-speed diesel (HSD) and motor gasoline (Mogas). They urged OGRA to direct OMCs to uplift committed quantities of POL products from local refineries.
OGRA had previously asked refineries and OMCs to sign SPAs with a binding ‘take or pay’ clause to resolve the issue of short upliftment of POL products. The refineries have requested OGRA to convene a meeting to discuss the implementation of this clause.
