The Islamabad High Court (IHC) has sought a comprehensive report from the Oil and Gas Regulatory Authority (OGRA) on the continued operation of a moratorium on the establishment of new oil marketing companies (OMCs), which was imposed in 2019 as an interim measure but has allegedly remained in force for nearly seven years.
Justice Arbab Muhammad Tahir issued notices to the respondents while hearing a petition filed by Fuelex Petroleum Pvt Ltd, challenging OGRA’s refusal to entertain its application for an OMC licence.
The petitioner has challenged an April 14, 2026 letter issued by OGRA, through which its application for an OMC licence was declined on the ground that the federal government had imposed a moratorium on the establishment of new OMCs.
The company contended that Ogra should have examined its application under the criteria prescribed under the Pakistan Oil Rules, 2016, rather than rejecting it solely on the basis of the moratorium.
The petition also challenges a Jan 9, 2019 direction under which Ogra was asked not to accept fresh applications from local investors until revised criteria for the establishment of OMCs were approved.
According to the petitioner, the 2019 direction envisaged the moratorium as a temporary arrangement pending approval of revised criteria by the cabinet’s Economic Coordination Committee.
It was further pointed out that the direction allowed applications from foreign investors during the intervening period, while local investors remained subject to the restriction.
The petitioner argued that despite the passage of approximately seven years, the revised criteria had not been approved, resulting in what it described as an indefinite moratorium on the licensing of new OMCs owned by local investors.
The company also relied upon Ogra’s Annual Report for 2024-25, contending that the report recorded the entry of new OMCs during the period when the moratorium was allegedly still in operation.
During the hearing, petitioner’s counsel Yahya Niazi argued that the 2019 direction could not continue indefinitely when the measure was originally linked to approval of revised licensing criteria.
The counsel also challenged the direction as being ultra vires the Ogra Ordinance 2002 and the Pakistan Oil Rules, 2016, arguing that the statutory authority to grant licences rests with Ogra and that the licensing process must be governed by the applicable regulatory framework.
The petition also raised constitutional questions, invoking Articles 4, 9, 10-A, 18, 24 and 25 of the Constitution, relating to lawful treatment, due process, the right to conduct lawful business, protection of property and equality before law.
Justice Arbab observed that the petitioner’s points required consideration and directed the respondents to submit their reports and para-wise comments.
The court specifically directed Ogra to submit a comprehensive report explaining the current regulatory status of the matter and the progress made regarding the revised criteria.
The report has been sought by the next hearing, scheduled for Oct 8.
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