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Fuel Supply Crisis Looms as Sindh Insists on Infrastructure Development Cess
Oil marketing companies warn of a looming fuel crisis as Sindh insists on collecting infrastructure cess on petroleum products. Prices may rise by Rs3 per liter amid port clearance delays.
MH
by Muhammad Hashir
2025-10-20
Fuel Supply Crisis Looms as Sindh Insists on Infrastructure Development Cess

A potential disruption in the nationwide supply of petroleum products is feared as tensions escalate between oil marketing companies (OMCs), the Oil Companies Advisory Council (OCAC), and the Sindh government over the collection of the infrastructure development cess on oil imports. According to industry sources, both the OCAC and major oil companies have sent emergency letters to the federal government and the Sindh authorities, warning that the impasse could lead to serious fuel shortages and a possible increase of up to Rs3 per liter in petroleum prices. The dispute stems from the Sindh government’s insistence on collecting the infrastructure development cess on imported petroleum products. This move, according to OMCs, is causing delays in port clearances, leaving several oil cargoes stranded and threatening the country’s energy supply chain. The Sindh government has reportedly asked oil importing companies to submit bank guarantees to secure the cess. However, OMCs have warned that such measures would severely impact their cash flow, making it difficult to maintain regular fuel imports and distribution. The Oil Companies Advisory Council highlighted in its letter that the Supreme Court has issued a stay order suspending the implementation of cess collection on imported petroleum products. The matter remains under judicial consideration, and oil imports have continued for the past two years under an undertaking arrangement pending a final verdict. Industry officials have urged immediate customs clearance for oil cargoes awaiting discharge at ports, warning that any further delays could trigger a nationwide fuel shortage and worsen the financial strain on OMCs. Analysts say the ongoing dispute underscores the fragile balance between provincial taxation powers and national economic stability, particularly in the sensitive energy sector where any disruption has far-reaching effects on prices, transport, and industry.

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Petroleum

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