The Oil Companies Advisory Council (OCAC) has emphasised the need to include private-sector refineries and Oil Marketing Companies (OMCs) in the ongoing consultations for formulating a deregulation policy for petroleum product pricing.
Adil Khattak, Chairman of OCAC and CEO of Attock Refinery Ltd, raised these concerns in a formal letter to the Secretary of the Ministry of Energy’s Petroleum Division. The letter follows a prior request (Ref: MEPD-907, November 19, 2024) by OCAC to include key private-sector stakeholders in the working group tasked with designing a roadmap for the downstream oil sector’s deregulation. The absence of private-sector entities in these discussions has alarmed industry players, given their critical role in the sector.
Khattak underscored the existential challenges facing private-sector refineries and OMCs, including the exemption of petroleum products from sales tax under the Finance Act 2024-25. He highlighted the rampant smuggling of petroleum products and also the delays in revising OMC margins.
He warned that these unresolved issues threaten the normal operations of the sector and could derail the implementation of the Brownfield Refining Upgradation Policy, designed to modernise the refining industry.
“The sales tax issue remains unresolved despite numerous meetings and directives from the Prime Minister and the Special Investment Facilitation Council (SIFC),” Khattak stated. “Taking up the revision of petroleum product pricing mechanisms at this stage is ill-timed. Furthermore, the non-inclusion of private-sector stakeholders in these discussions could lead to complications similar to those witnessed during the formulation and implementation of the Brownfield Refineries Policy over the past five years.”
Khattak criticised the Petroleum Division’s apparent preference for consulting public-sector entities while overlooking private-sector stakeholders. He noted that the Prime Minister and Finance Minister had repeatedly emphasised the importance of private-sector inclusion in policymaking.
“The refineries and OMCs are already facing an existential crisis,” he added. “It is crucial for the Petroleum Division to recognise the contributions and challenges of private-sector stakeholders and include them in these critical consultations. On behalf of the OCAC, I assure them of our fullest cooperation in the national interest.”
The OCAC cautioned that hasty or unilateral decisions on petroleum pricing deregulation could exacerbate existing challenges and have severe repercussions for the national economy. The council called for an inclusive approach to ensure the sustainable development of the downstream oil sector.
The letter was also copied to the Federal Minister for Petroleum, the Chairman of the Oil and Gas Regulatory Authority (OGRA), and the Director General (Oil) at the Petroleum Division for their consideration.
