Local oil refineries have begun offering petroleum products—particularly high-speed diesel (HSD)—to oil marketing companies (OMCs) at forward pricing in an attempt to offload excessive inventories ahead of an anticipated drop in fuel prices.
According to industry sources, forward pricing reflects the rates expected to take effect from April 16, 2025, following the fortnightly price review scheduled for April 15. Petrol and diesel prices are projected to decrease by Rs9-10 based on recent international trends, prompting refineries to offer advance discounts to encourage OMCs to lift stocks ahead of the formal revision.
While OMCs appear to be capitalizing on the situation, the benefit has yet to trickle down to consumers. Sector insiders argue that the government should bring forward the official price cut to prevent OMCs from retaining the margin and allow the public to benefit from falling international prices. They noted that an early revision, similar to the unexpected adjustment made on March 28 instead of March 31, is well within the government’s capacity.
The move comes as local refineries struggle with mounting HSD stockpiles and sluggish product upliftment. Attock Refinery Limited (ARL) has already shut down one of its crude distillation units due to operational constraints, while other facilities across the country are functioning at reduced capacity. The sector is currently sitting on approximately 700,000 metric tonnes (MT) of HSD—enough to meet nearly 50 days of average demand. If the trend continues, inventories could exceed 800,000 MT by the end of April.
Daily diesel demand currently hovers around 16,000 MT, while local production stands at 14,000 MT. Additional imports expected this month—around 138,000 MT—are set to push the total inflow to over 460,000 MT, putting further pressure on storage facilities. With ullage nearly exhausted, refineries are being forced to scale back production, potentially increasing reliance on imported petrol and disrupting the fuel supply chain.
