Ogra to issue revised plan for settlement of Rs66.7 billion oil sector claims

The Oil and Gas Regulatory Authority (OGRA) has assured oil marketing companies that it will share a revised framework and implementation timeline for the settlement of long-pending price differential claims worth Rs66.7 billion, The Express Tribune reported. 

The assurance came during a meeting chaired by Ogra’s new leadership and attended by the chief executives of more than 30 oil marketing companies. 

Industry participants described the meeting as a constructive engagement after years of unresolved issues raised by the Oil Companies Advisory Council and the Oil Marketing Association of Pakistan.

The main discussion focused on unpaid price differential claims, which the industry says have tied up substantial working capital at a time of financial pressure. Industry representatives also asked Ogra to simplify the verification process by reverting to a purchase-based assessment, saying this would speed up claim processing and reduce disputes.

According to participants, Ogra agreed to circulate revised terms of reference for the verification process along with a timeline for settlement of the claims.

The industry also raised concerns over revisions in oil marketing company margins, recovery of investments in mandatory digitalisation and sales tax-related issues. These matters are expected to be taken up separately in later meetings.

Oil marketing companies said margins were last revised in September 2023, with implementation staggered until December 2023, despite higher inflation, operating costs, financing costs, compliance expenses and mandatory stockholding requirements.

They also said companies were making digitalisation investments estimated at Rs1.2 billion, which have now been linked to the margin framework under Ogra’s recent directive.

The industry further pointed out that between March 7 and June 20, 2026, the pricing formula was changed four times for motor spirit and seven times for high-speed diesel without prior consultation. It said the June 20 revision alone created an estimated single-day exposure of Rs104 billion for oil marketing companies and refineries, with companies holding around 505,000 metric tons of motor spirit and 655,000 metric tons of high-speed diesel.