Pakistan’s oil marketing and refining sector is facing an acute solvency threat after the government imposed unilateral cuts to fuel prices, industry representatives warned.
The policy shift has triggered estimates of approximately Rs105 billion in losses for refineries and marketing companies, according to reports from Dawn.
Several oil marketing companies (OMCs) have cautioned that the financial strain could push them toward bankruptcy, exacerbating an already fragile operating environment.
Several oil marketing companies (OMCs) have cautioned that the financial strain could push them toward bankruptcy, exacerbating an already fragile operating environment.
The distress comes at a time when foreign participation in Pakistan’s energy sector is shrinking.
The combination of rising global crude costs and suppressed domestic retail margins has squeezed profitability to unsustainable levels for many operators.
With input costs linked to international benchmarks like Brent crude, the inability to pass through price increases to consumers has created a severe cash-flow mismatch for local firms.