OMAP urges govt action on Price Differential Claims as fuel supply risks rise

The Oil Marketing Association of Pakistan has urged the government to intervene in the Price Differential Claims system, warning that rising cost pressures are threatening fuel supply stability across the country.

In letters addressed to the federal energy minister and the chairman of the Oil and Gas Regulatory Authority, the association said the current structure of PDC has become difficult to sustain for the downstream petroleum sector.

According to the association, PDC levels have reached around Rs78 per litre on petrol and Rs176 per litre on diesel, significantly reducing margins for oil marketing companies and affecting their financial viability.

The group stated that frequent weekly price adjustments are creating uncertainty for inventory management and financial planning, particularly for smaller companies that may face operational constraints under current conditions.

OMAP said the existing system is effectively turning oil marketing companies into financial intermediaries, as they continue to absorb cost pressures without corresponding adjustments in returns.

To address the issue, the association proposed establishing a centralised PDC management mechanism through the State Bank of Pakistan. It also recommended extending payment timelines, facilitating access to low-cost bank financing, and forming a joint government-industry committee to review the policy framework.

The association noted that while efforts to maintain price stability amid regional developments are ongoing, the current pricing structure requires adjustments to ensure continued supply operations.