New Delhi, April 9: The ongoing conflict between the United States and Iran, which has lasted over a month, has significantly impacted crude oil supply. According to reports from Pakistan’s media, the country’s oil marketing companies are grappling with a severe cash crisis. Claims for price differentials amounting to approximately 107 billion rupees remain pending, increasing financial pressure on these companies.
Industry insiders have accused the Oil and Gas Regulatory Authority of complicating the payment process by repeatedly changing documentation requirements instead of settling outstanding payments.
Estimates from the industry indicate that only a small portion of the initial claim of around 27 billion rupees filed in mid-March has been settled, while subsequent claims totaling 70-80 billion rupees are still completely unpaid. The Express Tribune from Karachi reports that, as a result of these losses, companies are operating on very thin margins and struggling to maintain cash flow.
Officials state that the core issue is not transparency but rather uncertainty. They argue that every time oil marketing companies (OMCs) attempt to comply with regulations, the authority introduces new documentation demands.
These demands range from invoice-level matching to repeated certifications from CEOs, CFOs, and auditors, forcing companies to restart the entire process. A new revised format was issued by Monday night, but it remains unclear whether further changes will be made, perpetuating uncertainty.
A senior industry source commented, “Every time the industry prepares to comply, a new requirement emerges. There is no visible finish line.”
If the regulatory authority proceeds with a proposal to withhold 10% of payments until tax reconciliation with the Federal Board of Revenue is completed, conditions could worsen. This move could delay an additional 7.4 billion rupees for up to two months.
Price differential claims arise when the government sets fuel prices below the cost of procurement. Companies are then required to cover this gap. Delays in payments force oil marketing companies to borrow to make up for this difference, further intensifying their financial strain.
Industrial officials have warned that if liquidity continues to dwindle, this crisis could soon escalate into disruptions in fuel supply. The article further states that the sector has appealed to the Ministry of Energy for intervention, demanding immediate settlement of outstanding payments, a unified documentation framework, and the withdrawal of proposed payment withholding measures.
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