ISLAMABAD:The Oil Marketing Association of Pakistan (OMAP) has warned that deviation by local refineries from agreed Product Review Meeting (PRM) supply commitments could disrupt the country’s fuel supply chain if immediate regulatory intervention is not ensured.
In a letter addressed to the Chairman of Oil and Gas Regulatory Authority (OGRA), OMAP Chairman Tariq Wazir Ali expressed serious concern over the sudden change in supply practices by domestic refineries, stating that the development could destabilize the petroleum products market and create supply difficulties for oil marketing companies.
According to the association, the product volumes committed by local refineries during the most recent Product Review Meeting were mutually agreed upon, finalized, and formally locked by all stakeholders. Based on these confirmed allocations, most Oil Marketing Companies (OMCs) structured their supply plans and deliberately refrained from arranging import cargoes, relying instead on the supply volumes promised by local refineries.
However, OMAP said that refineries have now introduced a new “allocation system” under which petroleum products are being supplied in limited quantities to OMCs based on certain historical averages rather than the volumes agreed during the PRM.
The association described the move as a clear violation of commitments made during the meeting, warning that such unilateral changes are creating serious operational challenges for marketing companies responsible for maintaining nationwide fuel supply.
OMAP further pointed out that many OMCs currently do not have immediate import options available, as import planning was not undertaken following the finalization of refinery allocations in the PRM. At the same time, it noted that refineries are reportedly maintaining adequate product stocks but are still providing significantly reduced supplies to marketing companies.
The association cautioned that the restricted supplies are rapidly eroding the mandatory 21-day stock cover that OMCs are required to maintain under regulatory guidelines. These strategic reserves, it said, are being depleted on a daily basis due to lower product allocations.
While OMAP has been consistently communicating through various channels that there is no panic in the market and no immediate shortage of petroleum products, the association warned that continued reduction in refinery supplies could soon push OMC stock levels to critical levels.
It further stated that if the situation persists and fuel shortages begin to appear at retail outlets or filling stations are forced to close due to supply disruptions, any legal obligations or liabilities arising from such shortages should also be borne by the refineries and the regulator for allowing deviation from the agreed PRM commitments.
OMAP has urged the Oil and Gas Regulatory Authority to immediately intervene and ensure strict compliance by refineries with the committed PRM supply volumes.
The association also called on the regulator to initiate strict enforcement measures, including heavy penalties, against any refinery found violating the agreed commitments.
OMAP expressed hope that timely regulatory action would help prevent disruption in the national fuel supply chain and maintain stability in the petroleum products market across the country.
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