A fierce dispute has erupted between Oil Marketing Companies (OMCs) and local refineries over OGRA’s proposed “Take or Pay” clause in Sales Purchase Agreements (SPAs). OMCs, represented by the Oil Marketing Association of Pakistan (OMAP), have strongly opposed the clause, warning it could trigger severe liquidity crises, supply disruptions, and potential market exits, especially for small players.
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Refineries, including ARL, NRL, PARCO, CPL, and PRL, argue the clause is crucial for stable local production and reducing imports. They claim OMCs often fail to lift agreed quantities of fuel, disrupting refinery operations. The refineries have urged OGRA to enforce compliance, citing Rule 35(g) of the Pakistan Oil Rules 2016, which mandates prioritizing local production over imports.
OMCs accuse refineries of manipulating supplies and prices, warning that enforcing the clause without addressing smuggling and fair market practices would cripple smaller OMCs. They propose a “Take & Pay” model instead, allowing purchases based on actual demand.
OGRA plans to hold a joint meeting next week to resolve the issue, which could shape the future of Pakistan’s petroleum sector. The outcome may either bridge the growing rift or escalate tensions between the two sides.
