The government has begun developing a legally binding framework to regulate supply agreements between oil marketing companies (OMCs) and local refineries, aiming to resolve ongoing disputes over the upliftment and import of petroleum products, particularly high-speed diesel (HSD), The News reported, cited by sources.
The proposed agreement will introduce enforceable obligations for both parties, including a “take-or-pay” clause that would compel OMCs to lift locally produced fuel as allocated during Product Review Meetings (PRMs) or face penalties. Similarly, refineries would be required to share margins if they fail to deliver the committed volumes.
This initiative follows months of tension between refineries and OMCs, with local producers objecting to the continued import of HSD despite what they describe as sufficient domestic supply. The Oil and Gas Regulatory Authority (Ogra) has formed a committee to mediate the issue, inviting representatives from both sides to join upcoming discussions.
Under the current policy, OMCs are expected to prioritise local fuel before seeking imports. Pakistan State Oil (PSO) is authorised to import HSD from Kuwait Petroleum Corporation (KPC) in case of shortfalls, while other OMCs may only do so if shortages persist after PSO’s imports. However, sources said at least one OMC is pushing ahead with HSD imports despite the availability of domestic supply.
Officials note that some OMCs have routinely failed to meet their upliftment obligations, exacerbating tensions with refineries. The new framework is intended to enforce compliance and ensure stability in fuel supply planning.
As of now, the country holds significant fuel inventories, with HSD stocks at 604,000 metric tonnes, petrol at 470,000 metric tonnes, and furnace oil at 401,000 metric tonnes.
