After the country’s established automotive associations, petroleum industry has also started feeling shattered. A couple of days back, PAMA and PAAPAM raised their concerns in a letter to Prime Minister Shahbaz Sharif. However, in a recent update, Oil Marketing Association (OMA) did the same.
OMA has alerted the Premier of imminent collapse of petroleum industry. Chairman of the Association Tariq Wazir Ali, in a communication to PM Shahbaz Sharif, sought a help to recover losses amounting to a staggering 26 billion rupees (over $120 million).
Currency Fluctuation: Billions in Losses
This financial burden arises from deficiencies in the current mechanism for recovering foreign exchange gains and losses. Ali emphasized the urgency of addressing this issue to safeguard the industry from further financial strain and ensure its continued contribution to the national economy.
While acknowledging the government’s efforts to stabilize the economy, Ali expressed hope that a swift resolution to this specific problem would further strengthen economic stability. A robust oil industry benefits various sectors, and its smooth operation is crucial for the nation’s well-being.
Finalization of Recovery Mechanism
OMA Chairman Ali expressed concern about the Ministry of Energy’s delay in finalizing the proposed mechanism for recovering exchange rate fluctuations. This delay exposes the industry to potential vulnerability in the face of future currency movements.
“We urgently request your intervention to expedite the finalization of the proposed mechanism,” Ali urged the Prime Minister. A timely resolution is critical to mitigate the ongoing financial risks faced by the petroleum industry.
It’s important to note that oil refineries have previously voiced similar concerns, emphasizing the need for a system that ensures full recovery of actual currency exchange losses. Decisive action is paramount to ensure the industry’s stability.
Pakistan’s economic well-being hinges on a healthy oil industry. If oil companies continue to face significant financial losses due to unrecovered foreign exchange losses, their ability to operate effectively could be jeopardized. This scenario could lead to fuel shortages and price hikes for consumers, further impacting the economy.
On a related note:
*https://propakistani.pk/2024/07/21/rs-150-billion-paid-to-ipps-per-month-in-q1-2024-despite-generating-little-to-no-electricity/
Should we believe what these people are saying. Or are these people simply trying/shouting to get a bigger piece of the “action”.
@Ali Khan
As always you have commented senselessly, so here is for your information. First, on CarspiritPK you implied that Pro-Pakistan is not an authentic news source, then why are you citing it? Second, I.P.P. stands for independent power producers, some of whom are foreign owned and it was Khan government who raised agreements with them. Finally, the article is not mentioning anything about power producing industry causing the problems for oil industry, so I don’t understand why the heck you are opening your big mouth and acting the hero. Besides, the problem identified in the article has been brewing on for past two years now and Pakwheels has been reporting it on and off. They even reported that the issue happened owing to mismatch between fuel import cost and its selling price so once again your illogical comment is losing its ground.
In future you are requested not to comment and disrupt the decorum of this forum.
@Khurram
“First, on CarspiritPK you implied that Pro-Pakistan is not an authentic news source, then why are you citing it?”
It seem you are hanging on to and remember and track each and every word I ‘supposedly’ said. Should I be worried about your priorities in life?!
“Second, I.P.P. stands for independent power producers, some of whom are foreign owned and it was Khan government who raised agreements with them.”
You DO know IPPs were first introduced in Pakistan in the early 1990s. Agreements have been going on with them since then.
By the way, majority ownership is clearly mentioned in the article. But in true Khurram fashion, you did not even bother to read it did you; before launching into full tantrum mode 🤣? Not surprising since it has always been easier for you to spin a yarn/ wild conspiracy rather than deal with facts. 🤦♂️🤷♂️
I sighted the article because, be it the Auto lobby or the Power lobby or the oil lobby, they are all singing the same song, just a slightly different tune. Always somebody to blame. 👍