The government is moving ahead with plans to adjust profit margins for Oil Marketing Companies (OMCs) and petroleum dealers on Motor Spirit (MS) and High-Speed Diesel (HSD).
The Petroleum Division of the Ministry of Energy has submitted a detailed proposal to the Economic Coordination Committee (ECC) recommending changes to the current margin structure for petroleum products.
The move follows a September 2023 ECC decision, which directed that margins should be set by the Oil and Gas Regulatory Authority (OGRA) through a transparent mechanism, taking into account the operating costs of Pakistan State Oil (PSO) and other dealers.
The margin revision has stirred debate within the industry. The Oil Companies Advisory Council (OCAC) has requested an increase of Rs7.87 per liter, effectively Rs10 per liter in total, while the Oil Marketing Association of Pakistan (OMAP) has asked for a higher boost of Rs8.13 per liter, or Rs16 per liter combined for OMCs and dealers.
In high-level discussions co-chaired by the Petroleum and Finance ministers on July 16, 2025, and later on September 17, 2025, OGRA presented two options for revising margins based on the Consumer Price Index (CPI).
Two options on the table
Option I (conservative): Using annual CPI data for 2023-24 and 2024-25, this approach sets a ceiling of 10% and a floor of 5%. It would increase margins by Rs1.22 per liter for OMCs and Rs1.34 per liter for dealers.
Option II (moderate): Based on the same CPI data but with a higher ceiling of 15%, this option would raise margins by Rs1.63 per liter for OMCs and Rs1.79 per liter for dealers.
Earlier in the 2024-25 fiscal year, OGRA had suggested a Rs1.35 per liter increase for OMCs and Rs1.40 per liter for dealers using PSO data. However, the Petroleum Division’s revised submission in May 2025 recommended smaller hikes of Rs1.13 per liter for OMCs and Rs1.12 per liter for dealers.
The Finance Division has been tasked with reviewing the matter alongside the Petroleum Division and OGRA to formulate a consensus proposal before final approval.
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