OMCs face liquidity crunch as Rs107 billion fuel claims remain unpaid

Pakistan’s oil marketing companies (OMCs) are facing a liquidity squeeze as unpaid price differential claims (PDCs) have risen to around Rs107 billion, with delays in settlement affecting cash flow, according to a news report. 

Industry estimates show that an initial claim of about Rs27 billion submitted in mid-March was only partially cleared, while additional claims worth Rs70–80 billion remain outstanding.

Officials said the issue has been compounded by changes in documentation requirements by the Oil and Gas Regulatory Authority (Ogra). Companies said that as they meet one set of requirements, new conditions are introduced, including invoice-level reconciliations and repeated certifications from senior management and auditors. A revised format was issued this week, with no clarity on whether further changes will follow.

Industry sources said the evolving requirements have prolonged the process and created uncertainty, with some audit firms reluctant to participate as the demands fall outside standard audit scope.

The situation may tighten further if a proposal to withhold 10% of PDC payments is implemented, pending tax reconciliation with the Federal Board of Revenue. This could delay an additional Rs7.4 billion for up to two months.

PDCs arise when the government caps fuel prices below procurement cost, requiring reimbursement to OMCs. Delays in payments force companies to rely on borrowing to cover the gap, increasing financial pressure.

Industry representatives have warned that continued delays could affect fuel supply and have called for immediate settlement of dues, a consistent documentation framework and reconsideration of the proposal to retain a portion of payments.