OMCs Stock Oil to Maximize Inventory Gains

By Salman Khan:

Oil Marketing Companies (OMCs) in Pakistan have hoarded oil stocks to make inventor gains and offering heavy discounts to the customers, causing an artificial demand bubble before the next price change.

This seems that OMCs are making money as they had bought oil stocks at lower prices earlier and they were now offering discounts to create an artificial demand.

ECC approves Rs 6 per liter increase in OMCs’ Margins

Now, the High Speed Diesel (HSD) market has entered into a turmoil due to low demand, massive import and fluctuation in prices. This has led to intense competition among Oil Marketing Companies (OMCs).

Recent Ex-Refinery Price Trends:
• 16th – 31st Jan: Rs 182.26/ltr
• 1st – 15th Feb: Rs 188.72/ltr
• 16th Feb (expected): Rs 179.92/ltr

Refineries have been offloading surplus HSD at the end of January to attract oil marketing companies to lift stocks with inventory gains.

Now, the prices are expected to drop on February 16, 2025. But the oil refineries are struggling to address issue of excess stock but they don’t have buyers.

Industry experts say that liberal import policies have led to flood of surplus HSD stocks in the market.The cross border smuggling is another issue that has disrupted local pricing.

They say that Oil and Gas Regulatory Authority (Ogra) must take actions to curb issue of excessive imports to stabilize the market.The government should increase the rate of petroleum levy from current Rs 60 to Rs 70 per liter to enhance revenue collection.