The federal government has convened a high-level meeting with chief executive officers (CEOs) of oil refineries and oil marketing companies (OMCs) to address growing concerns over the financial health of Pakistan’s downstream petroleum sector.

The meeting, to be chaired by Federal Minister for Petroleum Ali Pervaiz Malik, comes after the Oil Companies Advisory Council (OCAC) warned that recent petroleum pricing decisions have exposed the industry to significant financial losses and heightened liquidity pressures.

In a letter addressed to the petroleum minister, the OCAC stated that the latest reduction in petroleum prices, implemented through a revised pricing mechanism, has resulted in estimated losses of approximately Rs104 billion on existing fuel inventories. According to the council, the affected stocks include around 505,000 metric tonnes of motor spirit (petrol) and 655,000 metric tonnes of high-speed diesel held by industry participants.

The industry body argued that these losses stem from policy decisions rather than operational inefficiencies, adding that repeated pricing interventions without adequate consultation are eroding working capital, weakening liquidity positions, and undermining investor confidence.

The OCAC highlighted that oil refineries and OMCs have continued to support national energy security by maintaining strategic fuel inventories and ensuring uninterrupted fuel supplies during periods of elevated global oil prices and market volatility. The council also noted the industry's role in reducing the burden of Price Differential Claims (PDC) and supporting essential sectors through reliable fuel availability.

Industry representatives further pointed out that OMC margins have remained unchanged since September 2023 despite rising inflation, increasing operational costs, and stricter regulatory compliance requirements. In addition, outstanding PDC claims amounting to approximately Rs66.7 billion continue to create cash flow challenges across the sector.

The council warned that prolonged policy uncertainty could discourage future investment, accelerate investor withdrawal, and threaten the financial sustainability of smaller market participants. It emphasized that long-term investments in fuel storage, logistics infrastructure, and retail networks require a stable and predictable regulatory environment.

To address these concerns, the industry has urged the government to introduce a transparent and consultative pricing framework, establish mechanisms to protect companies from abrupt inventory losses, and take concrete steps to restore investor confidence.

The meeting is expected to review the industry's concerns in detail and explore policy measures aimed at ensuring the sustainability of Pakistan’s petroleum supply chain while maintaining energy security and uninterrupted fuel availability across the country.