KARACHI: The Oil and Gas Regulatory Authority (Ogra) has prepared draft Product Review Meeting (PRM) regulations under the Oil Rules 2016, incorporating take-or-pay (TOP) agreements and mandating compliance from refineries, oil marketing companies (OMCs) and importers.
The framework sets out mechanisms for demand-supply analysis, import quota adjustments, and enforcement measures backed by penalties. The draft regulations were presented to a government committee chaired by the petroleum minister.
The forum agreed in principle with the PRM framework and instructed Ogra to expedite finalisation of the regulations, in consultation with stakeholders, before the next meeting. The move follows a dispute between the regulator, refineries, and an OMC over high-speed diesel (HSD) imports. The government intervened after refineries complained of financial losses caused by low offtake of HSD.
Under the draft rules, monthly PRM meetings would be held on the second Thursday and Friday of each month, with a pre-determined calendar to ensure attendance by all stakeholders. A monthly variance report — comparing PRM decisions with actual market performance — would be submitted to the Petroleum and Cabinet Division secretaries after the close of each relevant month.
The issue of inter-OMC sales was also discussed. It was agreed that this would be reviewed in detail by the sub-committee on deregulating the sector. Imranul Haq, former managing director of Pakistan State Oil (PSO), was tasked with finalising the sub-committee’s report in consultation with the Ogra chairman, and presenting it at the committee’s next meeting.
The chair noted that significant progress had been made and that, following the next meeting, work on compiling the committee’s report should begin. The task will be led by the Additional Secretary (Cabinet Division) and the Director General (Oil), under the supervision of the Ogra chairperson. The chair also stressed that end-to-end digitisation must be accelerated to address the challenge of fuel smuggling.
The Ogra chairperson proposed proportionately extending the benefit of deemed duty to other regulated fuels beyond HSD — without increasing consumer prices or reducing the benefit to refineries — in order to encourage a healthier output mix. The committee directed the Ogra chairperson; Imranul Haq; the director-general (Oil); and a representative from the Federal Board of Revenue (FBR) to review the proposal. They are to ensure that it aligns with current refining policies for brownfield and greenfield projects, as well as the customs duty structure.
A consensus proposal will be submitted at the next meeting, aimed at dismantling the perverse incentive to maximise diesel production at the expense of petrol, jet fuel and other products.