Pakistan’s OMAP Warns PDC May Cause Fuel Supply Disruptions Amid Rising OMC Challenges

Oil Marketing Association of Pakistan (OMAP) issues warning over Price Differential Claims (PDC)

The Oil Marketing Association of Pakistan (OMAP), in a statement issued on Tuesday, has warned that the current PDC mechanism could lead to fuel supply disruptions. The association called for immediate policy intervention to address mounting financial and operational challenges faced by oil marketing companies (OMCs).

OMAP Chairman Tariq Wazir Ali highlighted the “increasingly unsustainable situation” confronting the downstream petroleum sector in communications to Federal Minister for Energy Ali Pervaiz Malik and the chairman of the Oil and Gas Regulatory Authority.

While acknowledging the government’s efforts to maintain price stability and market discipline, OMAP said these measures had helped safeguard the national economy and ensure energy availability. However, the current structure and administration of the PDC were placing an extraordinary burden on OMCs, with PDC levels reaching approximately Rs78 per litre for petrol and Rs176 per litre for diesel.

Frequent and unpredictable weekly price adjustments have further compounded the problem, making financial planning, inventory management, and pricing strategies increasingly difficult. The association recommended reverting to a more predictable pricing cycle and ensuring timely reimbursement of claims to reduce uncertainty.

The situation is particularly critical for small and emerging OMCs, many of which are now at risk of operational shutdown. This could lead to reduced competition, supply bottlenecks, and broader implications for fuel availability. OMAP proposed measures including a centralized PDC management mechanism through the State Bank of Pakistan, extended payment timelines of up to 15 days, facilitation of low-cost financing by commercial banks, and immediate release of approved margins.