The oil industry is worried about losing Rs100b in inventory.

The oil business is worried that it may lose Rs100 billion worth of stock, which will hurt the whole sector.They have to sell the fuel at a loss of up to Rs135 per litre because of the drop in diesel prices. An industry executive remarked, “The estimated impact—over Rs100 billion in inventory losses—is not just a corporate setback; it is a systemic shock.” They also claimed that the big drop in diesel prices was good news, but it came at a hidden cost to Pakistan’s fuel supply chain.

Discussions with industry officials in the background showed that today’s help might turn into tomorrow’s problem if there are no changes.

Consumers all throughout the country are happy about the drop in fuel prices from Rs520 to Rs385 per litre late on Friday. The decision gives farmers, truckers, and households a real break from the rising cost of living.

But there is a deeper worry among some in the sector behind this moment of comfort. They stated, “The question is not whether prices should fall but whether our system can handle such shocks without putting energy security at risk.” They also claimed that Pakistan’s oil sector had a record rise and then a huge drop in just eight days.

Oil marketing companies (OMCs) are in charge of bringing in and distributing petroleum. To make sure that supplies don’t run out, they have to keep enough stock on hand. They imported diesel when it cost Rs520, and they paid for these purchases with bank loans. There is no way to deal with these kinds of losses. When prices go up, people look closely at their profits. When prices go down, people quietly take their losses. They said that this asymmetry shows a bigger policy disparity.

A lot of the business depends on checks that are dated after the fact. Dealers get fuel on credit and promise to pay it back later. OMCs rely on these payments to complete their responsibilities, such paying back banks and buying goods from other countries.

But this mechanism starts to break down when the buying price is very different from the selling price. Dealers who bought diesel for Rs520 are now selling it for Rs385. The checks they wrote don’t match up with reality anymore. Industry officials said that defaults and delays are already happening.

This is how systems fall apart: not all at once, but by losing trust. And as trust goes down, liquidity goes down too. Supply chains start to feel the strain when liquidity is tight.

The situation also shows how fragile the system is for setting fuel prices. Pakistan’s pricing system is based on picking the lowest worldwide benchmark over a certain time frame. In reality, the OMCs don’t buy fuel at the lowest price; they buy it at the average price, which is set by contracts and logistics. As a result, there is always a difference between the expenses that are expected and the costs that really happen. These losses get worse when things are unstable.

The same goes for the fixed premium that used to be permitted for imports; it no longer matches what the market is like. The formula still only recognised just over $5 at a time when worldwide premiums rose to almost $30 per barrel. This divergence is not only technical; it shows that the framework hasn’t kept up with global markets.

Pakistan has seen this happen before. In the power sector, modest differences between costs and recoveries led to the circular debt issue. The oil industry is increasingly showing signs like hidden costs, losses that are being absorbed, and systemic dangers that are slowly building up.

The difference is that fuel shortages are clear and happen right away. When supply is disrupted, the repercussions are seen fast, through transportation, food prices, and industry.We can’t keep thinking of systemic shocks as one-time phenomena. “Every time we ignore problems that are already there, we make the burden heavier, and future corrections will only get worse,” the industry officials said. “Energy policy isn’t just about changing prices; it’s also about keeping the arteries that keep an economy alive safe.”