Pakistan’s oil industry is teetering on the edge of collapse, as years of regulatory failures and government inaction have left critical operational, financial, and structural challenges unaddressed. The Oil Companies Advisory Council (OCAC) has once again raised the alarm, urging the Oil and Gas Regulatory Authority (Ogra) to tackle urgent issues, including unrecovered sales taxes, exchange rate losses, port inefficiencies, and the hurried rollout of retail digitisation nationwide, according to The Express Tribune.

OCAC Secretary General Syed Nazir A. Zaidi has formally written to the Ogra Chairman, with a copy sent to the petroleum minister, highlighting the industry’s precarious situation. Despite repeated discussions involving the Ministry of Energy (Petroleum Division), Ogra, and oil marketing companies (OMCs), meaningful progress has been minimal.

The council reported that pending GST refunds totaling roughly PKR 73 billion with the Federal Board of Revenue (FBR) since April 2022 have severely strained industry liquidity. OCAC called for a clear reimbursement mechanism that also accounts for financing costs at Karachi Inter-Bank Offered Rate (Kibor) plus 2%.

OCAC also criticised the exchange loss recovery framework as “non-transparent” and “unequal.” Industry representatives argue that Ogra’s failure to implement a standardised, timely adjustment system has left many companies uncompensated amid fluctuating exchange rates. Although the petroleum minister previously directed Ogra to expedite these claims, the regulator has yet to produce tangible outcomes.

The council further expressed concerns over the government’s phase-3 digitisation project, noting that short timelines and a lack of cost-recovery mechanisms are creating operational stress. Additionally, worsening port infrastructure at Fotco—including limited night navigation and inadequate pipeline facilities—has resulted in costly demurrage charges. OCAC urged Ogra to work with port authorities and industry stakeholders to implement practical and transparent solutions. Without swift intervention, Pakistan’s oil supply chain faces the risk of severe and prolonged disruption, potentially deepening the country’s ongoing energy crisis.