KARACHI: The Oil Tanker Contractors Association Karachi (OTCA) has lodged a strong protest with the federal government against what it describes as a “unilateral and arbitrary” increase in the pipeline quota for motor gasoline (MOGAS/ PMG), warning that it will suspend transport operations across the sector if its demands are not met.
In a letter addressed to the Secretary Petroleum at the Ministry of Petroleum, which was also made available to Business Recorder on Sunday, the association said the Petroleum Division had directed the Oil and Gas Regulatory Authority (OGRA) through a letter dated March 25 to enhance the pipeline quota of MOGAS to as much as 70 percent. The association said it was not consulted before the decision was taken.
“We are compelled to place on record our strongest protest against the unilateral and arbitrary enhancement of pipeline quota of MOGAS,” the letter stated, adding that the decision was made without any engagement with the transporters who are the primary stakeholders and directly affected by the change.
The association said the last consultative engagement between the two sides had fixed the pipeline quota at 45 percent and the road share at 55 percent. It argued that any subsequent increase without consultation was unlawful, arbitrary, and in blatant violation of the principles of natural justice.
The OTCA also pointed to the financial burden the decision had imposed on its members. It said the existing freight calculation mechanism was based on an average monthly mileage of approximately 5,800 kilometres per vehicle. Following the increase in pipeline quota; however, operational mileage had been slashed to approximately 2,000 kilometres per month per vehicle. The association said no corresponding revision in freight rates had been made to account for this drastic reduction, which it described as economic exploitation and financial strangulation of the transport sector.
The association further noted that its members had made substantial capital investments in strict compliance with OGRA-mandated standards, particularly to upgrade their fleet in the wake of the Ahmedpur Sharqia oil tanker explosion. It said those investments were made under regulatory compulsion and with the legitimate expectation that business continuity would be maintained. The abrupt diversion of business towards pipelines had now rendered those operations commercially unsustainable, it added.
The OTCA said the government’s actions were not only arbitrary but also legally untenable on four grounds. It cited violation of the principles of natural justice, as no stakeholder consultation or hearing had been provided; breach of legitimate expectation, as investments made under a defined regulatory regime had been undermined without justification; arbitrary and malafide exercise of authority, reflected in decisions lacking transparency and objective criteria; and denial of fair business opportunity, resulting in forced economic losses without compensation or alternative arrangements.
The association presented four demands: immediate suspension and review of the enhanced pipeline quota; restoration of the previously agreed road share of 55 percent, or formulation of a balanced mechanism in consultation with stakeholders; immediate revision of freight rates in line with the reduced operational mileage; and inclusion of transporters in all future policy decisions affecting their business.
The letter warned that if the concerns were not addressed forthwith, the association would formally challenge the decision as unlawful and without jurisdiction, suspend transport operations across the sector, and escalate the matter to all relevant authorities and stakeholders. It said all consequences arising from such actions would rest entirely upon the concerned authorities.
Copyright Business Recorder, 2026
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