Pakistan’s oil sector has called on the government to raise the margin for oil marketing companies (OMCs) to Rs. 10 per litre, a 27 percent increase from the current rate of Rs. 7.87 per litre.

In a letter addressed to the Minister for Petroleum, the Oil Companies Advisory Council (OCAC) reminded authorities that the industry had initially proposed a margin of Rs. 12.65 per litre in June 2024, citing mounting cost pressures. These included financing requirements for maintaining 20 days of fuel stock, turnover tax, handling losses, demurrage, unadjusted GST up to June 2024, and other operational expenses.

Following consultations with the Petroleum Division and the Oil and Gas Regulatory Authority, the industry revised its request to Rs. 10 per litre. The OCAC also urged the government to allow recovery of demurrage and unadjusted GST costs through the Inland Freight Equalisation Margin (IFEM).

While the Economic Coordination Committee has approved GST recovery via IFEM, the requested margin increase has yet to be addressed. The OCAC has pressed the minister to approve the revised margin without delay, warning that further financial strain could jeopardize the sector.

Additionally, the council called for the formal inclusion of the GST exemption in the Finance Bill 2025, arguing that both the margin revision and the exemption are crucial for the financial stability of the downstream sector and for ensuring an uninterrupted fuel supply across the country.