Senate Panel Suspects Massive OMC Windfall After Fuel Price Hike
ISLAMABAD: A heated meeting of the Senate Standing Committee on Petroleum on Monday raised serious questions over last month’s petroleum price increase, with senators suspecting that Oil Marketing Companies (OMCs) may have pocketed massive financial gains despite the availability of existing fuel stocks.
The controversy erupted after the Petroleum Division informed the committee that petroleum prices were increased to create “fiscal space and liquidity” for OMCs in view of volatility in international oil markets and uncertainty arising from the ongoing US-Iran conflict.
Chairman Committee Senator Umer Farooq and other members questioned why consumers were burdened with higher fuel prices when sufficient stocks were already available in the country. Senators observed that the timing of the increase appeared to have directly benefited OMCs holding old inventories purchased at lower rates.
The committee demanded a comprehensive audit of OMCs to assess the scale of profits earned after the price hike and directed that all stock-taking reports be submitted before the panel. Officials informed the committee that a joint monitoring mechanism involving OGRA, FIA, IB and other agencies had already been established for fortnightly inspections of petroleum stocks.
The Petroleum Minister told the committee that the absence of a permanent ceasefire in the US-Iran conflict, coupled with import constraints and disruption fears linked to the Strait of Hormuz, had forced the government to prioritize critical sectors. The committee was informed that gas supplies were diverted towards urea plants to prevent a fertilizer crisis amid difficulties in DAP imports.
The Senate panel was also informed that an LNG cargo was expected to arrive at Karachi Port on Tuesday to ease supply pressures.
During the meeting, senators expressed alarm over worsening gas shortages in Balochistan and criticized what they described as an unequal gas distribution system. Officials said the National Crisis Management Cell (NCMC) had prioritized gas supply to domestic consumers during meal hours, but members argued that entire regions continued to face prolonged outages.
The committee also took strong notice of soaring LPG prices and the widening gap between officially notified rates and prices being charged in the market. OGRA and other authorities were directed to launch strict action against profiteering and submit a detailed report.
Another major issue discussed was the continued denial of gas connections to residents of gas-producing areas despite Supreme Court rulings and Prime Ministerial directives. Officials blamed the delay on shortage of funds, drawing criticism from committee members.
The panel further questioned why RLNG-based power plants in Punjab were receiving natural gas allocations while similar facilities in other provinces, including the Jamshoro Power Plant, were allegedly being ignored. Senators demanded the complete gas allocation priority framework and warned that supplies to certain RLNG plants could be curtailed if equitable distribution was not ensured.
The committee also reviewed the suspension of CNG supply in Khyber Pakhtunkhwa, with members warning that the shutdown was severely affecting low-income citizens dependent on CNG for transport. Officials linked the suspension to RLNG shortages caused by regional tensions and shipping disruptions.
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