ISLAMABAD: The federal cabinet on Wednesday reportedly halted an hike in profit margins for petroleum dealers and oil marketing companies (OMCs) that had been approved by the Economic Coordination Committee (ECC) last month. Officials said the decision linked the ECC-sanctioned Rs2.56 per litre increase to the complete digitisation of the petroleum supply chain.
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On December 9, the ECC — chaired by Finance Minister Muhammad Aurangzeb — endorsed a phased increase in margins on petrol and high-speed diesel. The proposal allowed a build-up of Rs1.22 per litre for OMCs and Rs1.34 per litre for dealers, to be implemented in two equal tranches.
Under the ECC plan, the first tranche was to take effect with mid-December price adjustments, boosting OMCs’ margins to Rs8.48 per litre and dealers’ to Rs9.31 per litre. The second tranche was scheduled for June 1, 2026, contingent on digital monitoring systems connecting retail sales and stock data to government regulators.
However, prices announced on December 15 and 31 did not reflect the revised margins, despite lower petroleum rates during the same period. Sources said Prime Minister Shehbaz Sharif opposed the phased hike until full digital traceability was ensured across production, storage, transportation and retail outlets.
The move aligns with the government’s broader Digital Pakistan Initiative and follows the passage of the Petroleum (Amendment) Act 2025. The legislation mandates IT-based tracking of petroleum products to curb smuggling, adulteration and illegal retail operations, which authorities estimate cause Rs300-500 billion in annual revenue losses.
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Oil refineries and OMCs have long pushed for stronger border controls and market enforcement, arguing that illicit trade damages legitimate businesses. The cabinet’s decision signals that higher retail margins will depend on compliance with the new digital ecosystem, potentially delaying industry payouts until mid-2026.