The Islamabad High Court (IHC) has sought an explanation from the relevant authorities over the continued moratorium on issuing licences to new oil marketing companies (OMCs), with the court questioning why the restriction has remained in place for nearly seven years.
Justice Arbab Muhammad Tahir issued notices to the respondents while hearing a petition filed by Fuelex Petroleum Pvt Ltd against the Oil and Gas Regulatory Authority’s (Ogra) refusal to process its application for an OMC licence.
The company challenged an April 14, 2026 decision through which Ogra rejected its licence application, citing a federal government moratorium on the establishment of new OMCs.
According to the petitioner, Ogra should have assessed the application against the licensing requirements set out in the Pakistan Oil Rules, 2016, instead of turning it down solely because of the moratorium.
The petition also questioned a directive issued on Jan 9, 2019, under which Ogra was instructed not to accept new applications from local investors until revised criteria for establishing OMCs were finalised.
The company maintained that the 2019 measure was intended to be temporary and would remain effective only until the revised licensing framework received approval from the Economic Coordination Committee of the federal cabinet.
The petitioner further pointed out that the directive permitted foreign investors to submit applications during the interim period, while local investors continued to face restrictions.
It argued that despite the passage of around seven years, the revised criteria had yet to be approved, effectively turning the temporary arrangement into an open-ended restriction on locally owned OMCs.
The company also referred to Ogra’s Annual Report for 2024-25, claiming that the document showed new OMCs entering the market during the period in which the moratorium was reportedly still applicable.
During the proceedings, petitioner’s counsel Yahya Niazi argued that the 2019 directive could not legally remain in force indefinitely when it had originally been linked to the introduction of revised licensing criteria.
He also questioned the legal basis of the directive, arguing that it was beyond the authority granted under the Ogra Ordinance, 2002, and the Pakistan Oil Rules, 2016. According to the counsel, Ogra is the statutory body responsible for issuing licences and applications should be processed under the applicable regulatory framework.
The petition has also raised constitutional issues, citing Articles 4, 9, 10-A, 18, 24 and 25. These provisions concern lawful treatment, fundamental rights, due process, the right to conduct lawful business, property protection and equality before the law.
Justice Arbab said the issues raised in the petition warranted consideration and ordered the respondents to submit their reports along with para-wise comments.
The court specifically directed Ogra to provide a detailed report on the existing regulatory position and the progress made towards finalising the revised licensing criteria.
The matter is scheduled for further hearing on October 8, by which time the court has sought the required report.
