Fida Hussnain Lahore
The Oil Marketing Association of Pakistan (OMAP) on Thursday called for the urgent intervention of Prime Minister Shehbaz Sharif to address critical challenges threatening the petroleum industry.
In a letter to the Prime Minister, OMAP Chairman Tariq Wazir Ali outlined the pressing issues faced by the sector, warning of its potential collapse. He emphasized that despite being a vital pillar of Pakistan’s economy, the petroleum industry remains on the brink of failure due to unresolved problems.
“The prolonged neglect of these challenges jeopardizes the survival of Oil Marketing Companies (OMCs), particularly newer entities that bring competition and innovation to the market,” said Tariq Wazir Ali.
The OMAP chairman requested an immediate meeting with the Prime Minister to discuss solutions and collaborate on stabilizing the industry. Highlighting the industry’s significance, he stated, “The petroleum sector is Pakistan’s economic lifeline. Its collapse would severely impact energy security and economic stability.”
Tariq Wazir Ali expressed frustration over the lack of progress despite repeated efforts to resolve these issues. “We have exhausted every possible avenue without success. Your leadership is our last hope in these difficult times,” he said, urging swift action.
The chairman highlighted the prolonged delay in revising OMC margins, stressing that escalating business costs have rendered the current margins unsustainable.
“Revising margins is essential to maintaining the financial health of OMCs and ensuring uninterrupted services nationwide,” he said.
He urged the Prime Minister to instruct the Oil & Gas Regulatory Authority (OGRA) to finalize and implement appropriate margins that reflect current market dynamics. “The margin issue, unresolved since July 24, is hampering OMC operations,” he added.
Addressing the issue of zero-rated sales tax on petroleum products, including MS and HSD, Tariq Wazir Ali revealed that this policy has resulted in a PKR 65 billion cash flow shortfall across the sector. Smaller OMCs are particularly struggling, as unrecoverable taxes on freight and capital goods worsen their financial strain.
