Factors out 50% enhance in margins should come into drive from mid-Dec 2025, as agreed by ECC
ISLAMABAD:
The Oil Corporations Advisory Council (OCAC) has expressed severe concern over failure of the regulator to implement the federal government’s choice to lift margins of oil corporations and over name for full restoration of funding in digitisation.
In a letter to the Oil and Gasoline Regulatory Authority (Ogra) chairman, OCAC pointed to the absence of a notification for 50% enhance in margins of oil advertising corporations (OMCs), accepted by the Financial Coordination Committee (ECC), for motor spirit (MS) and high-speed diesel (HSD). “As per our understanding, Rs0.61 per litre (out of a complete of Rs1.22) was supposed to take impact from December 15, 2025, with the remaining 50% linked to the achievement of digitisation targets.”
In the course of the above-stated assembly held on January 14, 2026, the business was knowledgeable that the federal cupboard had suggested linkage of the whole enhance in margins with 100% digitisation. “Whereas the business stays absolutely dedicated to digitisation, this revised linkage has successfully deferred implementation of even the already-approved rapid enhance, thereby inserting a further monetary pressure on OMCs,” it mentioned. “OMCs proceed to function below a regulated margin framework that has remained stagnant for over two years and doesn’t mirror escalating prices associated to operations, financing, compliance and obligatory digitisation initiatives.” OCAC requested Ogra to plead the business’s case, in coordination with the Ministry of Power (Petroleum Division), earlier than the cupboard for rapid notification and incorporation of fifty% of the accepted enhance in margin, with impact from December 15, 2025.
Digitisation value restoration
OCAC recalled that it had already shared the digitisation value restoration mechanism via a letter dated January 12, 2026. To make sure well timed, clear and equitable restoration of digitisation investments, “it’s proposed {that a} devoted escrow-type account titled “Digitisation Fund” be created within the MS and HSD worth construction, much like the prevailing statutory levies (petroleum levy and local weather assist levy).
The proposed mechanism gives for milestone-based reimbursements, guaranteeing funds are launched in opposition to verified implementation, together with due compensation of the numerous investments already made by the OMCs in digitisation, it mentioned. Underneath the mechanism, OCAC added that the mixed margin of Rs2.56 per litre for the OMCs and sellers was proposed to be included within the worth construction as a separate line merchandise, break up equally between MS and HSD, ie, Rs1.28 per litre.
It requested Ogra and the Petroleum Division to acquire approval of the ECC for the inclusion of that separate line merchandise and train joint oversight over the operation of the fund. It prompt that the account could also be maintained as a financial savings account, with returns additional supporting the digitisation initiatives.
The oil business physique additionally referred to as for rapid reimbursement, inside 15 days of the institution of the mechanism, protecting each capital and operational prices. It underlined the necessity for the restoration of funding in auto tank gauging (ATG) methods already put in at stores and the contribution made by the OMCs to the Raahguzar App in addition to the contributions made by the OMCs and refineries to the monitor and hint system. OCAC proposed setting an preliminary milestone for the set up of ATGs at 10 stores per OMC, with reimbursement to be initiated inside 15 days of the receipt and verification of requisite documentation.
It prompt the continuation of the mechanism till 2030, consistent with the digitisation timelines submitted by the OMCs and extension of the mechanism past completion for upkeep and future technological upgrades. Within the occasion the above mechanism shouldn’t be adopted, OCAC proposed structured and ring-fenced restoration via the inland freight equalisation margin (IFEM), by incorporating the accepted per-litre digitisation value into every OMC’s notified value construction. “In such a case, well timed fortnightly restoration and reconciliation would must be ensured by Ogra.”
The business foyer emphasised early finalisation of the above issues, given their important significance to the monetary viability, regulatory compliance and uninterrupted provide operations of the OMCs.
