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Pakistan’s oil and gas regulator revises OMC and dealers’ margins

This is the first margin revision since September 2023

Pakistan’s oil and gas regulator revises OMC and dealers’ margins

Pakistan’s oil and gas regulator revises OMC and dealers’ margins

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The Oil and Gas Regulatory Authority (OGRA) has recommended increasing the margins on petrol and high-speed diesel (HSD) to PKR 9.88 per liter for oil marketing companies (OMCs) and PKR 10.01 for petroleum dealers.

This proposal aims to support the digitization and automation of fuel pumps over the next three years, addressing long-standing demands from OMCs and dealers due to rising costs.

This is the first margin revision since September 2023, according to OGRA.

The Oil Companies Advisory Council (OCAC) has recently highlighted several industry challenges, such as high financing costs, fuel smuggling, and insufficient profit margins, urging the government to update the outdated margins promptly.

Previously, the Economic Coordination Committee (ECC) of the cabinet decided that OGRA would manage future margin adjustments. The collaboration between OGRA, the Federal Board of Revenue (FBR), the Petroleum Division, and the oil industry aims to implement the digitalization of fuel pumps, based on data from Pakistan State Oil (PSO). This initiative is intended to modernize the industry and address increasing operational expenses.

Given the financial constraints faced by the sector, including high turnover taxes and sales tax exemptions, this proposed margin adjustment is seen as a crucial step to help OMCs and dealers maintain profitability.

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