OGRA proposes margin increases to Rs 9.88 for OMCs, Rs 10.01 for dealers

The Oil and Gas Regulatory Authority (OGRA) has proposed a margin increase on petrol and high-speed diesel (HSD) to Rs9.88 per liter for oil marketing companies (OMCs) and Rs10.01 for petroleum dealers. 

The move is aimed at supporting the digitization and automation of fuel pumps over the next three years. OMCs and petroleum dealers have long lobbied for these increases due to rising costs. 

According to OGRA, this is the first time the margins have been revised since September 2023. Current margins on petroleum products are Rs7.87 per litre for OMCs and Rs8.64 per litre for dealers.

The Oil Companies Advisory Council (OCAC) recently highlighted industry challenges, including high financing costs, fuel smuggling, and insufficient profit margins. OCAC stressed that the current margins are outdated, urging the government to act quickly. 

The Economic Coordination Committee (ECC) of the cabinet had previously decided that OGRA would handle future margin adjustments.

The collaboration between OGRA, the Federal Board of Revenue (FBR), the Petroleum Division, and the oil industry is focused on implementing the digitalization of fuel pumps. This effort, driven by data from Pakistan State Oil (PSO), is intended to modernize the industry and keep up with growing operational expenses.

As the sector faces financial constraints, including high turnover taxes and exemptions from sales tax, this proposed margin adjustment comes as a critical measure to help OMCs and dealers maintain profitability.