Sindh allows temporary clearance of PSO oil cargoes

KARACHI: The Sindh government has partially cleared Pakistan State Oil’s (PSO) imported oil consignments under a temporary arrangement that allows oil companies to release their cargos until October 31, 2025.

In addition to PSO, two other oil companies have applied for clearance of their consignments after the Sindh government granted a 15-day relief period to facilitate cargo clearance amid fears of fuel supply disruptions. The temporary relief follows the provincial government’s earlier decision requiring oil importers to provide bank guarantees instead of undertakings for customs clearance.

The matter was taken up by the federal government, with the Secretary of the Petroleum Division writing to the provincial authorities. The Petroleum Division has also constituted a ‘POL Monitoring Cell’ comprising government officials and representatives from the oil sector to review the implications of the new bank guarantee condition on petroleum product imports.

In their comment to The News, the spokesperson of the Oil and Gas Regulatory Authority (Ogra) said that “there is no situation of fuel shortage in the country. Some clearance delays were experienced earlier with imported petroleum products; however, the situation is now fully under control. [On Tuesday], PSO’s diesel vessel and WAFI’s petrol vessel were also cleared. Fuel supply operations across the country remain normal, and business continues as usual.”

Meanwhile, the Sindh Excise Department has issued a second emergency notice to oil marketing companies (OMCs), directing them to immediately submit the required bank guarantees. The department has clarified that only upon receipt of the guarantees will it resume the clearance and processing of fuel import cases.

Officials have further warned that in the event of any fuel supply disruption, responsibility will rest solely with companies that fail to comply with the guarantee requirement.Sources said the 15-day relief may allow the temporary release of cargos currently at port, but warned that the issue could resurface once the relief period ends on October 31.

Oil companies have expressed strong reservations over the 100 per cent bank guarantee condition, warning that it would severely strain their cash flows and raise operational costs. They cautioned that if the full guarantee requirement is implemented, the resulting financial pressure could ultimately be passed on to consumers, pushing up fuel prices by at least Rs3 per litre.

Industry executives noted that the temporary clearance granted to PSO provides short-term relief aimed at maintaining fuel availability in the domestic market, while broader discussions between the government and oil companies continue over financial guarantees and regulatory requirements.

An OMC executive warned that the liquidity squeeze caused by the bank guarantee condition could directly affect import schedules. “If this policy is enforced without adjustment, consumers could face a price impact of at least Rs3 per litre,” the executive said. While the clearance of PSO’s shipment offers temporary respite, the underlying dispute between Sindh’s regulatory stance and the downstream oil industry’s financial viability signals a potentially serious challenge ahead, the industry insiders said.