Pakistan’s main refineries have expressed serious concerns over the practices of the Oil and Gas Regulatory Authority (OGRA), which they argue are skewed in favor of imports and are hindering local fuel production. In a letter addressed to OGRA’s Chairman after a Product Review Meeting, major refineries highlighted regulatory indecision, particularly regarding high-speed diesel (HSD) upliftment, which they say is causing operational uncertainty. The communication, signed by the heads of Attock Refinery Limited, Cnergyico PK Limited, National Refinery Limited, and Pakistan Refinery Limited, was also sent to key government officials, emphasizing the critical issues faced by the refining sector.
The refineries noted that the meeting ended without resolving diesel sales plans, complicating production and inventory management amid falling prices. They warned that the ongoing lack of clarity in upliftment mechanisms is disadvantaging local producers, while imports continue to fill the market. They argued for a balanced regulatory approach that adapts to both downward and upward pricing trends to avoid market distortions.
A specific issue raised was the mixing of jet fuel with HSD cargoes, even when there is no need for diesel imports due to domestic oversupply. The refineries pointed out that jet fuel has a unique market and should be imported separately based on its demand and supply. They cautioned that this practice exacerbates inventory challenges and disrupts local production planning.
Additionally, the refineries highlighted a discrepancy in jet fuel pricing, noting that domestic prices drop significantly without imports, harming refinery economics and making Jet A-1 production unprofitable. They called on OGRA to provide clear HSD upliftment guidelines, stop the mixing of jet fuel with diesel imports when unnecessary, and align jet fuel pricing with global standards. They also suggested a weekly pricing system to better reflect international price changes and improve supply planning.
Despite numerous meetings and communications, the refineries lamented the lack of progress, warning that continued inaction could weaken local refining capabilities and increase reliance on imports.
