OMAP challenges Ogra’s jurisdiction over deregulated petroleum products

ISLAMABAD/KARACHI: The Oil Marketing Association of Pakistan (OMAP) has strongly accused the Oil and Gas Regulatory Authority (Ogra) of overstepping its legal authority by interfering in the deregulated petroleum segment, particularly in the trade of solvents.

In a formal letter written on Thursday to the Ogra chairperson, OMAP warned that this unauthorized interference is not only outside Ogra’s statutory mandate but is also harming legal business, discouraging investment, and undermining confidence across the sector.

According to OMAP, Ogra has been repeatedly demanding commercial and customer data from oil marketing companies (OMCs) regarding solvents and related by-products. These products, OMAP clarified, are not subject to Ogra’s pricing or licensing control and are legally classified as deregulated, free-market commodities.

The association stressed that Ogra’s legal authority is confined to regulated petroleum products such as motor gasoline, high-speed diesel, and petroleum infrastructure operations. These include licensing, price setting, enforcement and technical standards, but strictly within the regulated domain.

OMAP noted with concern that Ogra’s continued insistence on obtaining data related to solvents goes beyond its legal mandate and amounts to regulatory overreach. Such demands, the association argued, resemble tax or audit inquiries rather than regulatory oversight. They are creating unnecessary hurdles for both refineries and marketing companies, while simultaneously sowing confusion and fear among small traders and distributors who play a legitimate and tax-compliant role in the solvent supply chain.

The letter emphasised that no OMC or refinery is involved in tax evasion or adulteration, and all sales are conducted in line with approved specifications, with all applicable taxes duly paid. However, the repeated demand for sensitive customer-level data for deregulated products risks breaching client confidentiality. This not only exposes customers to unnecessary investigations but also damages trust and discourages them from participating in the formal economy. Such an approach, OMAP warned, undermines the government’s broader objectives of encouraging transparency, formalisation, and ease of doing business.

OMAP highlighted that the solvent trade, though a relatively small segment of the petroleum market, is a vital one. It supports local refineries, oil marketing companies, and small industries while contributing to national revenues. Rather than obstructing this legal trade, OGRA should be working to facilitate it and resolve genuine policy bottlenecks. The association argued that OGRA’s current stance risks pushing legitimate businesses toward the informal or black market, which would be counterproductive to the country’s economic goals.

OMAP called on Ogra to immediately cease exerting pressure on deregulated product markets and to stop demanding data for products that fall outside its jurisdiction. The association urged the regulator to realign its practices with the government’s vision for economic reform, investor confidence, and ease of doing business, by focusing strictly on its defined regulatory functions and leaving non-regulated areas to operate under market-based principles.