KARACHI: Local refineries have begun offering petroleum products — particularly high-speed diesel (HSD) — to oil marketing companies (OMCs) at forward pricing in a bid to offload excessive stock.
Forward pricing refers to the rates that will take effect from April 16, 2025, following the scheduled fortnightly price revision on April 15, 2025. According to oil sector sources, petrol and HSD prices are expected to drop by Rs9-10 in the upcoming review, based on trends in the international market. The forward pricing essentially reflects discounted rates at which refineries are urging OMCs to lift petrol and HSD.
While OMCs appear to be benefiting under current conditions, consumers are not seeing the advantages, as the official price revision will only occur on April 15, 2025. Industry insiders argue that the government should revise prices earlier to pass on the relief to consumers, instead of allowing OMCs to retain the margin. They highlighted that if the government was able to revise prices on March 28 instead of the previously scheduled March 31, it should likewise have no difficulty in bringing forward the mid-April revision to allow the benefits to reach the public sooner.
Refineries are currently under pressure due to large unsold HSD inventories and are rushing to sell amid sluggish upliftment, which is affecting their operations. The slowdown in product offtake — especially HSD — has already forced Attock Refinery Limited (ARL) to shut down one of its crude distillation units. Other refineries across the country are also operating at reduced capacity. The nation currently holds around 50 days’ worth of HSD stock due to the low upliftment, with inventories swelling to 700,000 metric tonnes (MT). This stockpile has reached concerning levels following a surge in imports in recent months, despite the sector being regulated. With storage ullage nearly full, refineries have been compelled to scale back production — raising the risk of increased reliance on imported petrol.
If the current trend continues, HSD stocks could exceed 800,000 MT by the end of April. With daily demand averaging around 16,000 MT and local refineries producing approximately 14,000 MT per day additional imports — around 138,000 MT of HSD is expected to arrive in April –would push the total system inflow to 460,000 MT by month’s end.
