Pakistan risks fuel crunch as cargoes stall in Sindh tax row

Pakistan faces the prospect of fuel station dry-outs after multiple petroleum cargoes remained stuck at Karachi ports amid a revived bank-guarantee requirement under the Sindh Infrastructure Development Cess (IDC). In a letter to the Sindh chief minister and federal authorities, the Oil Companies Advisory Council warned that at least five petrol and diesel vessels for major importers — including PSO, HPL, PGL and Parco — are awaiting customs clearance.

With motor spirit stocks at Keamari depleting, the industry cautioned that the supply chain could unravel within days unless the dispute is resolved. The council said recovery from a full-blown disruption could take more than two weeks if cargoes are not cleared immediately. The renewed insistence on 100% bank guarantees — after an interim arrangement allowing undertakings was withdrawn — has left firms scrambling for liquidity as they operate under regulated pricing and tight credit.

IDC, levied by Sindh and Balochistan at 1.8% on petroleum imports, adds more than Rs3 per litre to costs, according to the OCAC. The body urged the FBR and Customs to clear cargoes without guarantees for now and called for a policy fix: formally recognise petroleum pricing as a federal domain, integrate IDC into price formulas, and define a mechanism to settle past dues. Punjab and Khyber Pakhtunkhwa have already exempted petroleum products from IDC, the council noted.