Emerging OMCs demand fair, equal treatment

Pakistan's emerging oil marketing companies (OMCs) have voiced serious concerns about what they describe as unfair regulatory practices and unequal treatment compared to larger, established players in the petroleum industry.

The Oil Marketing Association of Pakistan (OMAP) has written a letter to Petroleum Minister Ali Pervaiz Malik to highlight the challenges they are facing despite making huge investments and significant contributions to the country's petroleum sector.

According to the letter, new OMCs have invested a total of Rs150 billion in petroleum infrastructure, of which Rs81 billion has been spent on building storage terminals, which now make up nearly 50% of the national storage capacity. Another Rs75 billion has been invested in developing retail outlets and other facilities and a further Rs70 billion is being injected into ongoing projects.

These companies have also played an important role in ensuring fuel supply to remote and troubled areas, contributed large amounts in taxes and created thousands of jobs across the country.

However, despite such large investments and efforts, emerging OMCs currently hold only 5% share of Pakistan's oil market. "OMAP believes this is unfair because these companies have more than 3,200 retail outlets and storage capacity equal to that of major players," the letter said.

They argued that market rules and policies, although designed to encourage competition and investment, were not being applied equally. One of the main issues highlighted was the strict enforcement of the rule that required all OMCs to maintain a minimum 20-day stock cover. OMAP argued that the rule should be applied flexibly, considering each company's size and financial strength.

However, they claimed, that the regulator – Oil and Gas Regulatory Authority (Ogra) – has not provided this flexibility.