OMCs To Face Penalities Over Failure to Maintain Stocks, Upliftment from Refineries
Staff Report
The oil and gas regulatory authority (Ogra) has decided to impose penalties on OMCs for Non-Compliance with the 20-day Stock Cover and Insufficient Upliftment from Refineries as per PRM Allocations
The decision was taken in its regulatory meeting held on May 29, 2025,
- Penalty Imposition for March 2025 Violations
The Authority, during its Regulatory Meeting No. 05 of 2025 held on May 29, 2025, reviewed serious contraventions related to stock maintenance and product upliftment. After deliberation, the Authority approved the immediate imposition of penalties by the concerned department under Rule 69 of the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016. The penalties are outlined as follows:
a) Penalties for OMCs Failing to Maintain 20-Day Stock Cover (MS & HSD):
As per Rule 37 of the Oil Rules 2016, Oil Marketing Companies (OMCs) that failed to maintain the mandatory 20-day stock cover in March 2025 shall be penalized based on the shortfall in average stock days:
| Avg. Days Cover | Penalty (PKR) |
|---|---|
| Less than 5 days | 10 million |
| 5 – less than 10 days | 7.5 million |
| 10 – less than 15 days | 5 million |
| 15 – less than 20 days | 1 million |
b) Penalties for Short Upliftment or Short Supply Against PRM Allocation:
Penalties will also be imposed on:
- OMCs that uplifted insufficient product from refineries,
- Refineries that failed to supply allocated product to OMCs,
- Refineries that produced less than their committed quantity in the Product Review Meeting (PRM) during March 2025.
| Shortfall Against PRM | Penalty (PKR) |
|---|---|
| More than 10% and less than 25% | 1 million |
| More than 25% and less than 50% | 5 million |
| More than 50% | 7.5 million |
| More than 75% | 10 million |
- Show Cause Notices for April and May 2025
For April 2025, the Authority directed the concerned department to issue Show Cause Notices (SCNs) to the relevant OMCs and refineries by May 30, 2025. A response period of seven (07) working days from the date of issuance was granted. The Authority further advised that SCNs for May 2025 be issued by June 20, 2025. - Future Enforcement Measures
Going forward, the Authority decided that any OMC failing to uplift local product against its PRM commitment or maintain a 20-day stock, and any refinery underproducing against commitment for three (03) consecutive months, will be subject to possible suspension of their marketing license. The Enforcement Department has been instructed to issue this directive to all concerned entities. - Draft of Petroleum Products Review Meeting (PPRM) Regulations–2025
The Authority instructed ED (Legal) to finalize the draft “Petroleum Products Review Meeting (PPRM) Regulations–2025” in consultation with relevant departments and present it on May 30, 2025. The draft will be submitted to stakeholders for feedback, who shall be allowed a period of seven (07) working days to provide their comments.
