Karachi, October 21, 2025 – Pakistan is on the brink of a severe fuel crisis after the Sindh government reinstated a 100% bank guarantee requirement under the Sindh Infrastructure Development Cess (IDC). The move has left several petroleum shipments stranded at Karachi ports, threatening to disrupt the nationwide fuel supply within days.
According to the Oil Companies Advisory Council (OCAC), at least five major petroleum vessels — carrying petrol and diesel for PSO, HPL, PGL, and Parco — are awaiting customs clearance. The OCAC warned that petrol stocks at Keamari are rapidly running low, raising concerns of widespread shortages during the crucial agricultural season.
“The oil supply chain is on the verge of collapse. Recovery could take over two weeks if cargoes remain uncleared,” the OCAC cautioned in a letter to the Sindh chief minister and federal authorities.
The dispute revolves around the 1.8% IDC imposed by Sindh and Balochistan on imported petroleum products. Despite the case being under Supreme Court review, Sindh’s Excise Department has abruptly ended the interim arrangement allowing undertakings instead of bank guarantees — now demanding billions in guarantees per vessel.
With tight credit lines and fixed pricing, oil companies say they cannot absorb the additional cost of over Rs3 per litre caused by the IDC. The OCAC has urged the Federal Board of Revenue (FBR) and Pakistan Customs to clear the stranded cargoes without guarantees and seek a long-term policy solution.
The council also emphasized that Punjab and Khyber Pakhtunkhwa have already exempted petroleum imports from the IDC, in line with federal jurisdiction over fuel pricing. Without immediate action, Pakistan could face fuel station shutdowns, disrupted logistics, and agricultural slowdowns, triggering broader economic instability.