Sindh Govt’s New Policy May Trigger Countrywide Fuel Shortage

Oil companies have warned that the Sindh government’s new policy could trigger a countrywide fuel crisis, disrupting petroleum imports and straining supply chains across Pakistan. The move has sparked urgent calls for federal intervention to prevent shortages.

The Oil Marketing Association of Pakistan (OMAP) raised alarms over the Sindh government’s recent decision to impose a 1.85% Infrastructure Cess and enforce a mandatory bank guarantee for petroleum imports. In a letter to Federal Minister for Energy (Petroleum Division) Ali Pervaiz Malik, OMAP Chairman Tariq Wazir Ali cautioned that the policy could paralyze the fuel supply chain within days.

The association said the new bank guarantee rule would lock up the working capital of oil marketing companies (OMCs), worsening liquidity challenges amid delayed tax refunds, foreign exchange losses, and regulated profit margins.

“The new cess regime will make it nearly impossible for OMCs to sustain import operations,” OMAP stated. “If this policy is not withdrawn, Pakistan could face serious fuel shortages.”

Industry experts estimate the cess could add Rs2.5 to Rs3 per litre to the cost of fuel, a burden companies cannot pass on to consumers due to price regulations. Tight credit lines and limited liquidity have already made it difficult for OMCs to maintain inventories, raising fears of empty fuel stations if import shipments are delayed at Karachi Port, Pakistan’s main petroleum entry point.

The Oil Companies Advisory Council (OCAC) echoed OMAP’s warning, noting that several petroleum cargoes, including those for PSO, HPL, and Parco, are stranded at Karachi ports following the Sindh government’s reinstatement of a 100% bank guarantee requirement under the Infrastructure Development Cess.

Impact of Sindh’s New Policy on Fuel Supply

OCAC warned that continued delays in customs clearance could cripple supply lines, disrupt transportation and logistics, and negatively impact the ongoing agricultural season.

Both industry bodies have urged the Energy Ministry, Sindh government, and Federal Board of Revenue (FBR) to act immediately to avert a nationwide fuel crisis. They emphasized that timely intervention is vital to ensuring energy security and economic stability.