FIA flags oil price compensation mechanism, alleges irregular claims by OMCs on old stocks 

• Two oil marketing companies claimed ₨15.6 million and ₨15.9 million in compensation despite making no refinery purchases or fuel imports during March 14-20 period 

The Federal Investigation Agency (FIA) has termed the mechanism for payment of price differential claims (PDCs) to oil marketing companies (OMCs) “faulty and irrational”, stating that the system allowed companies to seek compensation on old inventories that were unaffected by refinery price increases, The News reported. 

The observations were made in an interim report prepared by FIA’s Anti-Corruption Circle Karachi following the launch of Inquiry No 43/2026. As per the report, the existing mechanism calculated compensation on the basis of sales volumes without accounting for cheaper inventories already held by oil marketing companies or petroleum products imported before price increases.

According to the FIA, the mechanism was allegedly facilitated by Ogra officials through what the report described as inadequate verification procedures for sales data submitted by oil marketing companies.

Investigators stated that Ogra failed to consider old stock inventories and earlier imports while calculating compensation payments.

The FIA stated that the arrangement suggested possible collusion between officials of Oil and Gas Regulatory Authority and the Petroleum Division.

The report noted that the Petroleum Division, which oversees petroleum pricing mechanisms and margins for OMCs and dealers, had proposed a policy framework that encouraged hoarding and data manipulation for claiming compensation from the government.

The report argued that a more appropriate approach would have been to calculate compensation based on refinery purchases made by oil marketing companies, as refinery pricing is linked to average Platts benchmarks in a rising market.

As part of the inquiry, investigators cited two oil marketing companies that allegedly did not purchase petroleum products from local refineries or import fuel during the first PDC period from March 14 to March 20, 2026, but still claimed compensation of ₨15.6 million and ₨15.9 million, respectively.

The report further alleged that several companies claimed compensation amounts substantially higher than the actual financial impact arising from refinery purchases during the same period.

FIA said investigators were attempting to identify beneficiaries and examine the alleged nexus between regulators and companies involved in the payments.

According to the report, the interim findings were based on eight days of inquiry proceedings, interviews, interrogations and analysis of financial data before the Sindh High Court suspended the inquiry after one oil marketing company challenged the proceedings.