Downstream oil sector deregulation: OCAC refuses to endorse any future road map

ISLAMABAD: The Oil Companies Advisory Committee (OCAC) has issued a strong statement, asserting that the oil industry will not endorse any future roadmap for deregulation of the downstream oil sector unless the industry is actively involved in its development.

The committee emphasised the need for prior consultation with industry stakeholders to ensure any proposed changes are feasible and beneficial for all parties.

In a reminder, the industry stated, “We understand that the government is in the process of formulating a policy for the deregulation of petroleum product prices in near future.

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However, it is concerning to note that private sector refineries and oil marketing companies (OMCs) which play a pivotal role in the downstream oil industry, have not yet been included in the consultation process.“

The OCAC states that it is critical to highlight that the industry is already facing existential challenges due to exemption of sale tax issue on petroleum products, smuggling of petroleum products, delay in revision of OMC margins, and other challenges that have been highlighted time and again.

“We strongly urge to involve private sector refineries and OMCs in the consultation process to ensure the development of a balanced and workable deregulation policy for the country. Any unilateral decision on such a critical matter in haste will have severe ramifications for the oil industry and could intensify the existing challenges faced by it,” it states.

In July 2024, Petroleum Division had instructed the Oil and Gas Regulatory Authority (OGRA) to finalise the framework for transferring the responsibility of determining petroleum prices to the oil industry.

The OCAC had long advocated for the phased deregulation of the petroleum fuel sector, starting with LDO and kerosene.

In August 2022, the government had announced that the oil industry would be given a free hand to set petroleum product prices, with the deregulation mechanism to be implemented from November 2024.

Copyright Business Recorder, 2025