RECORDER REPORT

ISLAMABAD: Pakistan’s top oil marketing companies (OMCs) have sought urgent government intervention for notification of the long-pending Rs1.22 per litre increase in their regulated margin, warning that the industry cannot indefinitely absorb mounting financial and regulatory costs.

In a letter dated August 18, 2026, addressed to Federal Minister for Energy (Petroleum Division) Ali Pervaiz Malik, the Oil Companies Advisory Council (OCAC) said the OMC margin was last revised in September 2023. Since then, three full financial years — FY24, FY25 and FY26 — have elapsed and FY27 has begun without a commensurate adjustment, despite higher stock-cover requirements and expanding regulatory obligations.

The council said the industry had continued to support government policy despite these pressures, including the immediate implementation of the recently introduced daily petroleum pricing mechanism and deployment of substantial financial resources to maintain uninterrupted fuel supplies during geopolitical turmoil since March 2026.

It stressed that these obligations were being met while OMCs operated on a regulated gross margin of only 2 percent.

At the centre of the dispute is an ECC-approved increase of Rs1.22 per litre in the OMC margin, calculated on the basis of national CPI for FY24 and FY25, which has yet to be implemented.

OCAC termed the adjustment “long overdue”, saying the existing margin of Rs7.87 per litre was “grossly inadequate” to offset the erosion in business economics and the growing financial burden on the sector.

The council also pushed back against linking the approved margin increase to completion of the industry’s digitisation programme. OMCs, it said, were fully committed to the government’s digitisation objectives and had already submitted a three-year implementation plan, but making completion of a multi-year, capital-intensive programme a precondition for an already approved and overdue increase was “neither reasonable nor equitable”.

OCAC argued that the digitisation drive itself required a viable margin framework capable of providing the financial foundation necessary to undertake and sustain the required investments.

Compounding the pressure, approximately Rs66.7 billion in Price Differential Claims (PDCs) remains outstanding, while GST/input-tax reimbursements are also unresolved. According to OCAC, the resulting liquidity crunch has locked substantial industry funds in receivables and is placing severe pressure on the commercial viability of OMCs.

The council warned that weakening OMC finances could have wider consequences for investment in Pakistan’s downstream petroleum sector. With international participation already declining in recent years, it said continued policy uncertainty and prolonged regulatory intervention risked further eroding investor confidence at a time when Pakistan is seeking greater domestic and foreign capital.

In unusually pointed language, OCAC said OMCs had repeatedly demonstrated their commitment to Pakistan’s energy security and economic stability by undertaking substantial investment, assuming significant financial and commercial risks and maintaining uninterrupted petroleum supplies under exceptionally challenging circumstances.

However, it cautioned that the industry’s “continued cooperation and commitment” should not be construed as ability to “indefinitely absorb escalating financial burdens”.

The council maintained that a regulated margin should not merely enable OMCs to meet their obligations but must also provide a reasonable commercial return commensurate with the capital deployed, risks assumed and responsibilities undertaken in maintaining Pakistan’s petroleum supply chain.

OCAC consequently sought three measures: immediate notification and implementation of the pending Rs1.22 per litre margin increase; determination of overdue OMC margins for FY26 and FY27, together with a mechanism for timely annual revisions; and establishment of a commercially sustainable, fair and equitable regulatory framework supporting continued investment and financial viability of the downstream petroleum sector.

The council also requested an urgent meeting with the minister and senior industry representatives, saying immediate government intervention was “imperative” to safeguard OMCs’ financial sustainability and avert “serious and potentially irreversible damage” to the sector.

The letter was signed by representatives of Attock Petroleum, BE Energy, Cnergyico PK, Gas & Oil Pakistan, Hascol Petroleum, Pakistan State Oil, Parco Gunvor, Puma Energy Pakistan and Wafi Energy Pakistan, along with the OCAC secretary general.

It was also copied to the Federal Secretary (Petroleum Division), the Ogra chairman and the Director General Oil.