Oil Marketing Companies Seek Margin Increase After 3-Year Freeze

Pakistan's oil marketing firms are pushing the administration to growth their regulated margins, arguing that rising costs, heavier regulatory requirements and mounting receivables have put the industry under growing financial pressure.

Key points

• The Oil Firms Advisory Council stated 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.
• Add ProPakistani to Preferred Sources and see more of our stories in Google Search and Top Stories.
• PM Shehbaz Convenes Cabinet Session on Fuel Margins, Economy, Security.
• The industry body remarked businesses have additionally taken on substantial commercial risks since March 2026 against the backdrop of geopolitical uncertainty.
• Add as a preferredSource on Google Follow on Google News Join WhatsApp.

Notably, the Oil Firms Advisory Council stated 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 additionally kicked off without a fresh adjustment.

In practice, the council remarked oil marketing businesses are now operating with a gross margin of only 2 percent while facing higher stock cover requirements, extra compliance costs and greater financial commitments to maintain uninterrupted fuel supplies. PM Shehbaz Convenes Cabinet Session on Fuel Margins, Economy, Security.

Notably, the industry body remarked businesses have additionally taken on substantial commercial risks since March 2026 against the backdrop of geopolitical uncertainty. It continued that OMCs have continued supporting administration measures, including the lately introduced daily petroleum pricing system, despite the pressure on their finances.

For context, the Economic Coordination Committee has already approved a Rs. 1.22 per liter growth in the OMC margin based on annual national consumer rate inflation for fiscal years 2023 to 2024 and 2024 to 2025. Nevertheless, the adjustment has yet to be formally notified. The existing margin of Rs. 7.87 per liter, the council remarked, no longer adequately reflects the industry's operating costs.

In practice, the OCAC additionally triggered concern over liquidity, saying around Rs. While matters involving sales tax and input tax reimbursements have additionally not been resolved, 66.7 billion in cost differential claims remain outstanding. It cautioned that funds tied up in receivables are putting further pressure on the financial position of oil marketing firms.

Notably, the council resisted making the approved margin rise conditional on completion of the sector's digitization program. It remarked 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.

Meanwhile, the industry body cautioned that prolonged financial pressure and regulatory uncertainty could weaken investment in Pakistan's downstream petroleum sector. It remarked declining international participation and continued regulatory intervention could produce the market less attractive to both domestic and foreign investors.

Meanwhile, the OCAC has asked the administration to immediately notify the Rs. 1.22 per liter growth, determine overdue margins for fiscal years 2025 to 2026 and 2026 to 2027, and establish a system for annual and timely margin revisions. It remarked a commercially sustainable regulatory framework is necessary for OMCs to continue investing in fuel infrastructure and maintaining the country's energy security.

Obtain the latest business news, market insights, and economic updates wherever you prefer.

Taken together, the developments around oil Marketing Companies Seek Margin Increase After 3 point to a situation that is still moving, and the coming days should bring more clarity.