Private petroleum company: FCC suspends SHC’s order regarding subsidy payment within a week

ISLAMABAD: The Federal Constitutional Court suspended a Sindh High Court (SHC) order regarding the payment billions of rupees in subsidy to a private petroleum company within one week.

A two-member bench comprising Justice Aminuddin Khan and Justice Ali Baqar Najafi on Thursday heard the federal government petition against the SHC’s order. The court accepted the federal government’s appeal for hearing and issued notices to all parties involved. It also sought the complete case record from the SHC.

The High Court, on May 12, ordered the payment of subsidy amounts to Gas and Oil (GO) Pakistan Ltd within a week. It also restrained the Federal Investigation Agency (FIA) from taking action regarding the matter.

The Additional Attorney General informed the bench that the federal government made a decision to provide subsidies to petroleum companies to bridge the price differential during the national petroleum crisis. However, the private company subsequently filed a claim seeking approximately 14 billion rupees in subsidies from the government. In response, the government directed the FIA to launch an investigation to verify the sales data and the legitimacy of the claims.

The case was adjourned indefinitely.

According to a notification issued by the Cabinet Division, the federal government constituted a high-level committee to examine and scrutinize a price differential claim (PDC) submitted by GO, amounting to Rs14 billion for the period from March 21 to April 2, 2026.

The notification stated that the Oil and Gas Regulatory Authority (OGRA) has received the claim under the Inland Freight Equalisation Margin (IFEM) mechanism and was directed to reimburse any differential on Pakistan State Oil (PSO) imports arising from changes in the pricing mechanism.

However, the government expressed concern over GO’s operations, which are currently under investigation by the Federal Investigation Agency (FIA).

The notification noted that although proceedings are presently subject to stay orders issued by the Sindh High Court, the allegations, if proven, “could lead to a false claim to the authority by the said company”.

“In view of the detailed interim progress report furnished by the FIA, the alleged conduct of GO in their PDCs and the volume of claims made warrants thorough scrutiny,” the notification stated.

The committee has been tasked with examining the claims in the public interest and making recommendations to Ogra for further action.

Copyright Business Recorder, 2026