Pakistan’s oil marketing companies are pushing the government to increase their regulated margins, arguing that rising costs, heavier regulatory requirements and mounting receivables have put the industry under growing financial pressure.
The Oil Companies Advisory Council said the margin was last revised in September 2023 and has remained unchanged through fiscal years 2023 to 2024, 2024 to 2025 and 2025 to 2026. The new fiscal year has also started without a fresh adjustment.
The council said oil marketing companies are now operating with a gross margin of only 2 percent while facing higher stock cover requirements, additional compliance costs and greater financial commitments to maintain uninterrupted fuel supplies.
The industry body said companies have also taken on substantial commercial risks since March 2026 amid geopolitical uncertainty. It added that OMCs have continued supporting government measures, including the recently introduced daily petroleum pricing system, despite the pressure on their finances.
The Economic Coordination Committee has already approved a Rs. 1.22 per liter increase in the OMC margin based on annual national consumer price inflation for fiscal years 2023 to 2024 and 2024 to 2025. However, the adjustment has yet to be formally notified. The existing margin of Rs. 7.87 per liter, the council said, no longer adequately reflects the industry’s operating costs.
The OCAC also raised concerns over liquidity, saying around Rs. 66.7 billion in price differential claims remain outstanding, while issues involving sales tax and input tax reimbursements have also not been resolved. It warned that funds tied up in receivables are putting additional pressure on the financial position of oil marketing companies.
The council opposed making the approved margin increase conditional on completion of the sector’s digitization program. It said OMCs have already submitted a three year implementation plan and remain committed to the government’s digitization goals, but argued that the capital intensive program should not delay an adjustment that has already been approved by the ECC.
The industry body warned that prolonged financial pressure and regulatory uncertainty could weaken investment in Pakistan’s downstream petroleum sector. It said declining international participation and continued regulatory intervention could make the market less attractive to both domestic and foreign investors.
The OCAC has asked the government to immediately notify the Rs. 1.22 per liter increase, determine overdue margins for fiscal years 2025 to 2026 and 2026 to 2027, and establish a system for annual and timely margin revisions. It said a commercially sustainable regulatory framework is necessary for OMCs to continue investing in fuel infrastructure and maintaining the country’s energy security.
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