Cabinet modifies ECC decision on OMCs, dealers’ margins, links full increase to digitisation

ISLAMABAD: The federal cabinet has modified the decision of the Economic Coordination Committee (ECC) of the Cabinet, allowing oil marketing companies (OMCs) and petroleum dealers to receive 100 percent of the approved increase in margins, subject to achieving digitalisation targets set by the Oil and Gas Regulatory Authority (OGRA).
The ECC on December 9, 2025, the ECC Committee had reviewed and approved a proposal to revise the margins of OMCs and petroleum dealers on MS and HSD, adjusting them in line with the National CPI for 2023–24 and 2024–25, with increases capped between 5% and 10%. It also decided that half of the increase in the margins will be paid immediately, while the remaining half will be conditional on digitization progress, with the Petroleum Division to report back by June 1, 2026.
According to official sources, the cabinet, in its meeting held on December 23, 2025, ratified the ECC’s decision taken on December 9, 2025 titled “OMCs and Dealers’ Margins of Petroleum Products—Motor Spirit (MS) and High-Speed Diesel (HSD)” with a key modification. Under the revised cabinet decision, the entire increase in margins—rather than 50 percent—will be implemented, conditional upon OMCs and dealers meeting OGRA’s digitalisation benchmarks.
Earlier, the ECC had approved a phased implementation under which 50 percent of the margin increase was to be paid immediately, while the remaining 50 percent was to be released upon satisfactory progress on digitisation, with the Petroleum Division required to report back by June 1, 2026.
The ECC had also reviewed and approved the proposal to revise margins of OMCs and petroleum dealers on MS and HSD by indexing them to the National Consumer Price Index (CPI) for FY2023–24 and FY2024–25, with the increase capped between 5 percent and 10 percent.
Industry stakeholders had been pressing for a larger revision. The Oil Companies Advisory Council (OCAC) had sought an increase of Rs2.13 per litre over the existing margin of Rs7.87 per litre, taking it to Rs10 per litre. Meanwhile, the Oil Marketing Association of Pakistan (OMAP) demanded a significantly higher increase of Rs8.13 per litre, proposing a margin of Rs16 per litre.
The framework for revising margins was extensively discussed in a meeting held on July 16, 2025, co-chaired by the Petroleum and Finance Ministers, and attended by the OGRA Chairman and Additional Secretaries from both ministries. It was agreed that margins should be revised in line with CPI movements.
Subsequently, on August 29, 2025, OGRA presented two options for margin revision. Further deliberations among OGRA, the Finance Division, and the Petroleum Division on September 17, 2025 resulted in the formulation of three options:
Option 1: Margins revised based on annual National CPI for FY2023–24 and FY2024–25, with a floor of 5 percent and a ceiling of 10 percent, resulting in an increase of Rs1.22 per litre for OMCs and Rs1.34 per litre for dealers.
Option 2: Margins revised based on annual National CPI for FY2023–24 and FY2024–25, with a floor of 5 percent and a ceiling of 15 percent, resulting in an increase of Rs1.63 per litre for OMCs and Rs1.79 per litre for dealers.
Option 3: Margins revised based on annual National CPI for FY2023–24 and FY2024–25, with a floor of 3 percent and a ceiling of 10 percent, resulting in an increase of Rs1.05 per litre for OMCs and Rs1.15 per litre for dealers. Ends