The Sindh government’s 1.8% Infrastructure Development Cess has delayed the clearance of petroleum products at Karachi Port. This raises concerns about a potential nationwide fuel shortage.
The Sindh government’s new cess is anticipated to increase fuel prices by over Rs 3 per litre. This is putting additional pressure on the supply chain during the crucial agricultural season.
The Oil Companies Advisory Council (OCAC) has written to Sindh Chief Minister Murad Ali Shah. They urge the immediate customs clearance for Pakistan State Oil’s tankers, MT Islam 2 and MT Hanifa, which are currently docked at the Karachi Port Trust (KPT). Stocks at the Keamari oil terminal are running low. Delays in the cargo deliveries from Wafi Energy and Parco pose a risk of operational collapse.
Read: Govt Cuts Petrol Price by Rs5.66 per Litre; New Rates Effective October 16
The Oil Marketing Association of Pakistan (OMAP) has issued a warning to Energy Minister Ali Pervez Malik regarding the risks associated with the cess and mandatory bank guarantees that could threaten imports. Chairman Tariq Wazir Ali emphasised the financial strain caused by delayed tax refunds and low profit margins. He stated that the current policy could freeze working capital. Additionally, it could potentially lead to shortages of petrol and diesel.
OMAP urged federal intervention to negotiate with Sindh and the Federal Board of Revenue to prevent pump dry-outs. A two-week recovery period is anticipated post-resolution. The Sindh government has not commented.
The cess threatens Pakistan’s economy, disrupting agriculture and industry. Swift action is critical to avert a crisis.
