ISLAMABAD: Pakistan could face a petrol and diesel supply crisis as the Oil Companies Advisory Council (OCAC) has warned the government that a shortage of funds is affecting the oil marketing companies’ ability to purchase fuel.
In an urgent letter addressed to the Petroleum Minister and the chairman of the Oil and Gas Regulatory Authority (OGRA), the OCAC said the country currently has petrol stocks for only 18 days and diesel reserves for around 27 days.
The council said oil marketing companies were facing severe liquidity constraints, making it increasingly difficult to finance fresh fuel imports and maintain adequate strategic reserves.
According to the letter, the government owes oil marketing companies around Rs66.7 billion, with a substantial amount stuck in price differential claims and other margins.
The OCAC warned that the declining availability of working capital was affecting companies’ ability to procure additional petroleum products.
The council said oil marketing companies were currently selling petrol and diesel from their existing stocks and using the proceeds to meet payment obligations to banks and suppliers.
It added that the amount outstanding from the government was equivalent to the cost of approximately five petrol cargoes, further putting pressure on the companies’ liquidity position.
OCAC General Secretary Nazir Abbas Zaidi said the government’s commitment to clear the outstanding payments within 15 days had not been fulfilled even after six months.
He also alleged that the OCAC’s concerns were not being adequately addressed by the OGRA chairman.
The council urged OGRA to immediately release the outstanding claims to ease the financial pressure on oil marketing companies and prevent potential disruptions to fuel supplies.
The OCAC also pointed out that while dealers’ margins had been increased, its own margin of Rs1.22 per litre had yet to be revised.
The council cautioned that continued delays in clearing the outstanding payments could make it increasingly difficult for oil marketing companies to maintain sufficient stocks and meet the country’s fuel requirements.
