The oil sector has pushed back against the Oil & Gas Regulatory Authority’s (OGRA) proposed revisions for oil marketing companies (OMCs) and petroleum dealers.
Both the Pakistan Petroleum Dealers Association (PPDA) and the Oil Companies Advisory Council (OCAC) have voiced their disapproval.
The PPDA, in a letter to OGRA’s chairman, rejected the margin adjustments, arguing that they were made without proper consultation. The association claims that their demands for higher margins, reflecting rising operational costs such as salaries, utilities, and construction expenses, have been ignored.
PPDA stated they are seeking a margin of 7%, equivalent to Rs17 per litre, to keep their businesses viable. They warned that inadequate margins could push dealers toward unethical practices.
“We won’t accept margins that include costs for digitalization,” they stated.
OGRA had earlier proposed raising margins to Rs9.88 per litre for OMCs and Rs10.01 per litre for dealers, including a Rs0.5 per litre allocation for digitalization and automation over the next three years. However, OCAC stated that this is insufficient to cover the $120 million cost of automating fuel pumps.
OCAC also criticized the proposal, arguing that the effective increase of Rs0.85 per litre does not even cover inflation. The body insists the OMCs need an increase closer to Rs4.78 per litre. They also highlighted the ongoing challenges of smuggling, high taxes, and financing costs that remain unresolved.
