POL prices: OCAC argues frequent changes hurt investor trust

ISLAMABAD: The Chairman of the Oil Companies Advisory Council (OCAC) cautioned that frequent and unpredictable changes in petroleum product prices could create uncertainty for investors and adversely affect foreign investment.

He told a Senate committee that policy continuity is critical to attracting foreign investment and preventing capital flight in the petroleum sector.

A meeting of the Senate Standing Committee on Petroleum was held on Tuesday at the Pakistan State Oil (PSO) Headquarters in Karachi. The session was convened to review critical matters about the petroleum sector.

According to a handout issued after the meeting, the PSO presented a comprehensive briefing to the Committee on its institutional role, operational performance, and effectiveness of fuel supply management in the context of the prevailing Gulf war situation.

The Senate panel was informed that the closure of the Strait of Hormuz had resulted in severe regional supply chain disruptions, including non-availability of refined petroleum products, non-availability of vessels, acute demand and supply shocks, and significantly higher freight and procurement costs. The PSO briefed the Committee that it had proactively responded to these challenges through alternative sourcing from multiple regional and international supply channels, throughput optimization, demand-driven product redistribution, round-the-clock operations at key installations, and sustained coordination with law enforcement and regulatory agencies. The Committee was also briefed on PSO’s future supply strategy, including efforts to strengthen strategic fuel reserves and long-term sourcing arrangements to enhance energy security.

The Committee also reviewed the Petroleum Division’s Public Sector Development Programme proposals for 2026-27, covering project prioritization, fund allocations and alignment with national energy sector objectives. The Committee was informed that no new project allocations had been made under the current cycle, with funds only directed towards ongoing geological mapping activities.

This was then followed by MD PARCO, who presented a detailed briefing on the LPG tanker explosion incident of January 27, 2025, which had occurred at an illegal decanting facility in Multan, resulting in casualties, injuries, and damage to private property. The Committee was informed that PARCO Pearl Gas (Private) Limited had, on humanitarian grounds, disbursed compensation to the victims.

The Senators raised concerns regarding accountability for the incident and also raised objections to the characterisation of the compensation as humanitarian assistance, noting that PPGL bore responsibility as the principal entity that had engaged the third-party contractor involved. The Committee sought firm assurances on measures taken to prevent the recurrence of the incident.

MD PARCO then briefed the Committee on a comprehensive set of immediate, medium-term, and long-term preventive and corrective actions that have since been implemented, including a multi-layer Vehicle Tracking System deployed across all fleets, upgraded tamper-evident sealing mechanisms, enhanced driver monitoring, and route surveillance, among other safety measures.

Copyright Business Recorder, 2026