ISLAMABAD: Pakistan is facing the risk of a crippling nationwide fuel shortage after the Sindh government abruptly reinstated a 100 per cent bank guarantee requirement under the Sindh Infrastructure Development Cess (IDC), leaving multiple oil vessels stranded at Karachi ports.
According to the Oil Companies Advisory Council (OCAC), at least five major petroleum cargoes — carrying petrol and diesel consignments for PSO, HPL, PGL and Parco — are currently awaiting customs clearance. With petrol stocks at Keamari fast running out, the oil industry has warned of possible fuel station dry-outs across the country within days if the situation is not urgently resolved.
“The oil supply chain is on the brink of collapse. Recovery could take more than two weeks if these cargoes are not cleared immediately,” the OCAC cautioned in a letter sent on Monday to the Sindh chief minister and federal authorities.
The standoff stems from the 1.8 per cent IDC imposed by Sindh and Balochistan on petroleum imports. While the Supreme Court is still hearing the legality of the cess, the Sindh Excise Department has withdrawn an earlier interim relief that allowed undertakings instead of bank guarantees. It is now demanding billions of rupees in guarantees for each incoming vessel — a requirement the industry says is financially unsustainable.
With regulated prices, limited credit lines and razor-thin margins, oil marketing companies argue that the IDC adds more than Rs3 per litre to fuel costs — a burden that cannot be passed on to consumers.
The OCAC has urged the Federal Board of Revenue (FBR) and Pakistan Customs to immediately clear petroleum cargoes without the bank guarantees, and called for a policy-level solution that formally recognises petroleum pricing as a federal domain. The council also proposed incorporating IDC into the national fuel pricing formula and developing a mechanism to settle past IDC dues.
It noted that Punjab and Khyber Pakhtunkhwa have already exempted petroleum products from the cess, aligning with federal jurisdiction over fuel pricing.
Industry officials warn that unless the issue is swiftly addressed, Pakistan could face fuel shortages, disruptions in transport and logistics, and serious delays in the ongoing agricultural season — potentially triggering wider economic repercussions.
