Oil Companies Warn of Nationwide Fuel Shortage

Oil companies have warned of an impending fuel crisis due to new policy by the Sindh Government. Marketing Association of Pakistan (OMAP) has said that the Sindh government’s new policy imposing a 1.85 per cent Infrastructure Cess and a mandatory bank guarantee could paralyze the country’s petroleum imports within days. In a letter to Federal Minister for Energy (Petroleum Division) Ali Pervaiz Malik, OMAP Chairman Tariq Wazir Ali urged immediate federal intervention, saying the move by the Sindh Excise Department threatens to choke the already fragile oil supply chain. The association cautioned that the requirement of submitting bank guarantees instead of the previous undertakings would lock up the working capital of oil marketing companies (OMCs). The association fears it can make the matters worse at a time when they are already reeling from delayed tax refunds, foreign exchange losses, and thin regulated margins. “The new cess regime will make it nearly impossible for OMCs to sustain import operations,” the letter stated. “If this is not withdrawn, Pakistan could face serious disruptions in petroleum supplies.” Industry sources said the additional cess adds around Rs2.5 to Rs3 per litre to the cost of fuel, a burden that cannot be passed on to consumers under the current pricing mechanism. With regulated prices and tight credit lines, companies are struggling to maintain inventory levels, raising fears of dry fuel outlets if import shipments are delayed at Karachi Port — the country’s main petroleum entry point. In a similar letter, the Oil Companies Advisory Council (OCAC) also sounded the alarm, warning that several petroleum cargoes remain stranded at Karachi ports due to the Sindh government’s sudden reinstatement of a 100 per cent bank guarantee requirement under the Infrastructure Development Cess. The council said at least five major shipments, including those carrying petrol and diesel for PSO, HPL, and Parco, are awaiting customs clearance, and any further delay could cripple the supply chain. Industry groups have urged the Energy Ministry to coordinate with the Sindh government and the Federal Board of Revenue (FBR) for a swift resolution, warning that any delay could trigger fuel shortages, disrupt transport and logistics, and affect the ongoing agricultural season. “The situation demands urgent intervention to ensure energy security and economic stability,” OMAP said, adding that without corrective action, the country could face a full-scale petroleum supply crisis.