|
Pakistan''s oil industry stands on the verge of collapse as years of regulatory failure and governmental inaction have left key operational, fiscal, and structural challenges unresolved.
The Oil Companies Advisory Council (OCAC) has once again sounded the alarm, drawing the attention of the Oil and Gas Regulatory Authority (Ogra) to a host of pressing issues from unrecovered sales tax and exchange rate losses to port inefficiencies and the rushed digitisation of retail outlets across the country, as reported by The Express Tribune. According to The Express Tribune, OCAC Secretary General Syed Nazir A Zaidi has written to Ogra Chairman, with a copy sent to the petroleum minister, outlining the dire state of the industry. Despite repeated discussions involving officials from the Ministry of Energy (Petroleum Division), Ogra, and oil marketing companies (OMCs), little progress has been made. The OCAC revealed that GST refunds worth approximately Pakistani Rupees (PKR) 73 billion, which have been pending with the Federal Board of Revenue (FBR) since April 2022, have severely undermined the industry''s liquidity. The council urged the creation of a clear reimbursement mechanism that would also cover financing costs at Karachi Inter-Bank Offered Rate (Kibor) plus 2%. The OCAC criticised the current exchange loss recovery system, calling it "non-transparent" and "unequal." Industry players maintain that Ogra''s failure to develop a standardised, timely adjustment formula has left several companies uncompensated amid exchange rate volatility. The petroleum minister had earlier directed Ogra to resolve these claims swiftly, but the regulator has yet to deliver tangible results. The OCAC also raised concerns over the government''s phase-3 digitisation project, warning that the short implementation timelines and lack of cost-recovery mechanisms are causing operational strain, as cited by The Express Tribune. Additionally, the council highlighted worsening port infrastructure issues at Fotco, including limited night navigation and insufficient pipeline facilities, which have led to costly demurrage charges. The OCAC has urged Ogra to coordinate with port authorities and industry stakeholders to finalise practical, transparent solutions. Without immediate intervention, Pakistan''s oil supply chain could face a severe and prolonged disruption, further deepening the country''s energy crisis, as reported by The Express Tribune. (ANI)
|
