Ogra defers diesel import decision

KARACHI: The Oil and Gas Regulatory Authority (Ogra) has deferred its decision on the import of high-speed diesel (HSD) for one week to assess the sales trend of the fuel.

During the week, the regulator held two meetings with stakeholders in the oil sector to discuss the demand and supply situation of petroleum products in the country, along with local production and potential import requirements. Ogra will analyse the situation in the coming week before making a final decision regarding HSD imports.

According to sources, the meetings specifically focused on HSD sales and domestic production. The issue of importing HSD was also raised, particularly Pakistan State Oil’s (PSO) long-term import contract, despite sufficient local production.

However, Gas and Oil Pakistan (GO), an oil marketing company (OMC), pressed for the import of 38,000 metric tonnes of HSD -- a request strongly opposed by the refinery sector. Refinery representatives argued there was no need for further imports, as the country is already producing adequate volumes and national stocks have risen above 700,000 metric tonnes due to subdued domestic demand.

In response to the refineries’ objections, Ogra deferred its decision to further review the supply and demand situation.

Sources revealed that the deferment prompted GO to write a letter to the prime minister, criticising the Ogra chairperson’s role and alleging ineffective regulation of the sector.

Refineries have strongly opposed any further HSD imports, warning that excessive stockpiles are disrupting their operations. The growing inventory of unsold diesel is hindering refinery output, which in turn is affecting the production of other key fuels such as petrol and jet fuel, thereby impacting the overall supply chain.

Officials noted that the diesel stock currently exceeds 700,000 metric tonnes, with limited upliftment taking place. While some improvement in demand has been observed over the past two days, it remains insufficient to significantly draw down existing inventories.

They also questioned Ogra’s approach to decision-making, accusing the authority of allowing imports simply to maintain tank levels, regardless of whether the volumes are actually needed.

Refinery operations continue to be affected due to non-upliftment of HSD, which is also hitting the output of other petroleum products.