The Oil Marketing Association of Pakistan (OMAP) has reached out to Prime Minister Shehbaz Sharif, urging immediate intervention to facilitate the recovery of significant foreign exchange losses incurred by the petroleum industry.
In a letter addressed to the Prime Minister, OMAP Chairman Tariq Wazir Ali highlighted the industry’s accumulated unrecovered exchange losses amounting to Rs26 billion, due to deficiencies in the current foreign exchange gain/loss recovery mechanism. He emphasized that swift action is essential to safeguard the industry from further financial strain and to maintain its crucial role in the national economy.
Ali commended the government’s efforts in stabilizing the economy and expressed hope that addressing this issue promptly would further strengthen economic stability, benefiting various sectors including petroleum.
Despite efforts such as a meeting convened by the director general (oil) on April 8, 2024, and the development of a concept paper by the Ministry of Energy subsequently forwarded to the Oil and Gas Regulatory Authority (Ogra) for feedback on April 22, 2024, progress has been slow. Ogra provided its comments on May 22, 2024, and the Prime Minister’s Office, through the Special Investment Facilitation Council, requested further inputs on June 7, 2024.
The chairman noted the Ministry of Energy’s delay in finalizing the proposed mechanism for recovering exchange gains and losses, stating concerns over potential vulnerability to future exchange rate fluctuations.
“We urgently request your intervention to expedite the finalization of the proposed mechanism,” Ali urged, underscoring the critical need for resolution to mitigate ongoing financial risks faced by the petroleum industry.
Previously, oil refineries also called upon the government to ensure full recovery of actual currency exchange losses, emphasizing the importance of timely and decisive action.
