ISLAMABAD: Pakistan’s leading refineries have raised serious concerns that regulatory indecision and import-friendly practices by the Oil and Gas Regulatory Authority (OGRA) are discouraging local production and disrupting the country’s fuel supply chain.
In a joint communication addressed to the Chairman of OGRA following the Product Review Meeting (PRM) held on December 22, 2025, major refineries warned that the regulator’s failure to provide clear directions, particularly on high-speed diesel (HSD) upliftment, is creating uncertainty and directly impairing refinery operations.
The letter, signed jointly by the chief executives of Attock Refinery Limited, Cnergyico PK Limited, National Refinery Limited, and Pakistan Refinery Limited, was also copied to the Federal Minister for Energy (Petroleum Division), the Secretary of Petroleum, and the DG Oil, highlighting the serious concerns raised by the country’s refining sector.
According to the refineries, the PRM ended abruptly without conclusive outcomes, leaving diesel sales arrangements for the current and upcoming months unresolved. This lack of clarity, they said, has made it increasingly difficult for local refineries to plan production, manage inventories, and schedule dispatches, especially during periods of downward pricing trends.
The refineries cautioned that continued ambiguity in upliftment mechanisms is structurally disadvantaging local producers, while imported products continue to enter the market. They argued that when refinery supply obligations are rigidly enforced during downward pricing cycles, the regulatory framework must operate symmetrically during upward trends as well. Failure to do so, they warned, results in policy asymmetry that distorts market outcomes.
A major concern highlighted in the letter relates to jet fuel imports being commingled with HSD cargoes, even in situations where there is no actual requirement for diesel imports due to a domestic glut. The refineries stressed that jet fuel is a distinct product with a niche market and should be imported separately based on its own demand and supply dynamics.
They warned that linking jet fuel imports with HSD cargoes under current market conditions intensifies inventory pressures, worsens upliftment constraints, and further weakens local production planning, without serving any genuine supply requirement.
The refineries also flagged a growing distortion in jet fuel pricing, noting that domestic jet fuel prices are significantly lower when imports are not made. This divergence, they said, is damaging refinery economics, rendering Jet A-1 production unviable at a time when refineries are already incurring heavy losses on furnace oil exports.
To address these challenges, the refineries urged OGRA to issue clear regulatory directions on HSD upliftment, discontinue the commingling of jet fuel with diesel imports where no HSD imports are required, and align jet fuel pricing with international benchmarks and import parity pricing. They also proposed a weekly pricing mechanism to reduce lags, reflect global price movements more accurately, and support efficient supply planning across the downstream sector.
Despite repeated meetings and extensive correspondence, the refineries expressed regret that no meaningful progress has been made, warning that continued inaction risks undermining local refining capacity and incentivising greater reliance on imports.
