Oil marketers seek PM’s help for loss recovery

Say industry’s forex losses have accumulated to Rs26b

LAHORE:

The Oil Marketing Association of Pakistan (OMAP) has appealed to Prime Minister Shehbaz Sharif to intervene immediately and facilitate the recovery of foreign exchange losses of the petroleum industry.

In that regard, OMAP Chairman Tariq Wazir Ali wrote a letter to the prime minister to draw his attention to the unrecoverable exchange losses of the petroleum industry, which had been pending for a considerable time period.

He stressed that prompt action would help safeguard the petroleum industry from further crisis and ensure its continued contribution to the national economy.

He praised the government’s policies for putting the country back on the right track, adding that the “commitment to economic stability and growth is a beacon of hope for many industries, including the petroleum industry.”

The letter stated, “The industry has accumulated significant unrecovered exchange losses of Rs26 billion due to deficiencies in the current foreign exchange gain/loss recovery mechanism. Despite acknowledging these flaws and recognising the losses incurred by companies, the Ministry of Energy (Petroleum Division) has been reluctant to address the matter promptly.”

To address the issue, the director general (oil) convened a meeting on April 8, 2024. Subsequently, the Ministry of Energy developed a concept paper, which was forwarded to the Oil and Gas Regulatory Authority (Ogra) for comments on April 22, 2024.

After reviewing the document, Ogra provided its feedback and sent it back to the ministry on May 22, 2024. Additionally, on June 7, 2024, the Prime Minister’s Office, through the Special Investment Facilitation Council, directed the relevant authorities to provide comments on the matter.

The association chairman regretted that the Ministry of Energy had not yet finalised the proposed mechanism for recovering the exchange gains and losses.

“The petroleum industry remains vulnerable to further losses if exchange rates fluctuate again. Therefore, we urgently request your intervention to expedite the finalisation of the proposed mechanism,” he added.

Earlier, oil refineries also called on the government to make full recovery of the actual currency exchange losses.