KARACHI: The allocation of additional high-speed diesel (HSD) volumes has severely disrupted Pakistan State Oil’s (PSO) supply chain planning after several oil marketing companies (OMCs) failed to lift their allocations and refineries produced beyond declared levels. The state-owned OMC has said it will not accept quantities beyond its usual October allocation.
In a letter to the chairperson of the Oil and Gas Regulatory Authority (Ogra), PSO expressed serious concern that, despite repeated warnings, additional HSD volumes arising from the non-upliftment of product review meeting (PRM) allocations and refinery overproduction are being disproportionately diverted to it for October 2025.
“Such extraordinary reallocation, nearly 45 per cent above PSO’s regular allocation trend and announced only days before the start of the month, has severely disrupted PSO’s supply chain planning and management,” the company said.
PSO added it was “utterly surprised” at the rationale for such drastic changes, arguing the decisions appeared to favour the commercial interests of certain refineries and OMCs.At the PRM of August 19, 2025, refineries allocated 126,000 tonnes of HSD to PSO, in line with the monthly trend. This was later revised to 145,000 tonnes on September 10, and then drastically increased to 174,000 tonnes at the PRM of September 17, within just seven days.
PSO noted that its main refinery partners produced around 88,000 tonnes more than their declared numbers between June and September 2025, and further increased their October production by 48,000 tonnes compared to figures declared at the August PRM. The company said such discrepancies between declared and actual production, along with repeated revisions, have compromised the industry’s supply chain planning.It stressed that PSO should not be compelled to absorb unplanned volumes, particularly as it is consistently meeting its PRM commitments while maintaining stock cover well above the 20-day regulatory requirement.
The company pointed out that most OMCs, both large and small, are failing to maintain the mandatory 20-day cover, having short-lifted 78,000 tonnes between June and August 2025. “This exposes the industry to supply chain risks in the event of sudden demand surges, as witnessed during October-November 2024. Such non-compliances create undue pressure on compliant OMCs, distort market dynamics and raise financing costs for maintaining mandatory stock cover,” it said.
PSO also expressed concern that a particular OMC, which failed to lift about 21,000 tonnes between June and August, had been allowed to import a 38,000-tonne cargo in October instead of being obliged to meet its outstanding refinery allocation.
The company concluded that, rather than burdening PSO with unplanned volumes, Ogra should strictly enforce PRM allocations, obligate all OMCs to lift their declared refinery allocations in full, and ensure refineries produce in line with their declared numbers to avoid further supply chain imbalances.