Pakistan's refineries struggle as OMCs fail to lift fuel

February 22, 2025 (MLN): Pakistan's refineries are facing severe challenges in sustaining operations due to the failure of Oil Marketing Companies (OMCs) to uplift committed quantities of Motor Spirit (MS) and High-Speed Diesel (HSD), according to a letter addressed to the Chairman of the Oil & Gas Regulatory Authority (OGRA), Mr. Masroor Khan.

The letter, referencing a PR Meeting held on February 10, 2025, highlights a significant shortfall in sales.

A recent DSSP report dated February 10, 2025, states that during February 1-9, 2025, MS sales fell short by 20%, while HSD sales declined by 31% against the projected demand for February.

This has raised concerns about import cargo assessments.

Despite OMCs importing MS and HSD as planned, they have not uplifted the committed refinery volumes, leading to an imbalance between imports and actual sales trends.

This situation has shifted the demand shortfall burden onto refineries, causing further operational strain.

As a result, the stock coverage for MS and HSD stands at 36 days and 39 days, respectively.

Given these circumstances, the letter urges that all upcoming MS and HSD imports should either be deferred to March 2025 or stored in bonded warehouses until March 2025.

Adding to the crisis, an ongoing lack of rainfall is expected to impact HSD sales due to delays in the harvesting season.

Moreover, the approaching month of Ramzan, which traditionally sees lower sales of both MS and HSD, is likely to intensify the pressure on refineries.

If import schedules are not adjusted accordingly, the refineries could face further operational difficulties.

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