Refineries seek OGRA,s support for products uplifting

ISLAMABAD: The country’s refineries have urged Oil and Gas Regulatory Authority (OGRA) to resolve their product uplifting issues on priority for a smooth functioning of the supply chain.
In a joint letter, top bosses of five refineries has cited OGRA’s letter of March 13, 2025 in response to the Refineries’ joint letter dated February 27, 2025 and refineries meeting held in Karachi on March 03, 2025, have expressed their concerns regarding the contents of OGRA’s letter, which unfortunately, appear to differ from the mutual understanding that was established during the meeting held on March 03, 2025 in Karachi.
According to the refineries during the meeting, all the refineries raised their serious concerns about insufficient product off-takes resulting from the failure of OMCs to uplift the committed quantities of HSD & MOGAS as agreed during the periodic PR meetings, and requested OGRA intervention which was duly acknowledged by the Authority. However, they believe that the explanation provided in OGRA’s letter with respect to determination of insufficiency in local production before approving imports is misconceived and misleading.
“As clearly stipulated under Rule 35(g) of Pakistan Oil (Refining, Blending, Transportation, Storage, and Marketing) Rules 2016 (OGRA Rules), an OMC is required to give an undertaking to OGRA that it shall first uplift local product before opting for imports. This is the premise on which OMCs are granted their licences,” they added.
The refineries have stated that that enforcement of such compliance rests with OGRA, which is equally empowered to take action against any defaulting OMC under Rule 69 of OGRA Rules 2016. Moreover, it is OGRA’s responsibility to protect the public interest.
“Allowing imports when the local production is not being uplifted at the expense of country’s precious foreign exchange and consumer price (resulting from higher IFEM) undermine the spirit of OGRA’s statute and regulatory framework,” they continued.
Refineries are of the view that as already explained in Refineries’ joint letter, all the Refineries already have contractual/commercial agreements with OMCs for supply of products. With regard to OGRA’s statutory, responsibilities, functions and corresponding regulatory they believe it is essential for OGRA to ensure that Refineries’ product upliftment is prioritized before allowing OMCs any deficit imports, in line with Rule 35(g). Moreover, it is OGRA’s responsibility to ensure that only such OMCs commence operations which have a valid license and contractual/commercial arrangements with local refineries.
“We sincerely appreciate OGRA’s initiative in our supply agreements with OMCs to incorporate a “Take or pay” clause to address uplifting issues. However as already explained, the Refineries already have binding contracts with OMC and in any event, such changes can only be incorporated if they are mutually agreed upon by all stakeholders, with a clear implementation mechanism, and the enforcement of the overall supply chain arrangement is monitored and ensured by OGRA,” top bosses of Refineries maintained.
They further stated that Refineries in Pakistan’ are ‘Strategic Assets’ of the country and their sustainability and continuity is essential for the prosperity and economic development of Pakistan. The local Refineries are the backbone of heavy industrial development and are intrinsically connected to Defense and Energy Security needs of the country. Any over-reliance on imported fuels without properly prioritizing local production will not only increase risk to the country’s energy supply chain but has the potential to result in disastrous consequences, especially as Pakistan continues to recover from its on-going financial challenges. We would like to reassure you that all the Refineries are fully compliant with provisions of OGRA Ordinance 2002, as well as the Rules, Regulations and Technical Standards, and directions of the Authority in both letter and spirit.
After explain the background, Refineries have request OGRA’s proactive role in addressing the local Refineries’ product uplifting issues on priority for a smooth functioning of the supply chain in the country. Ends