Karachi: The Oil Companies Advisory Council (OCAC) has issued a call for swift governmental action, underscoring the precarious financial situation faced by Pakistan's Oil Marketing Companies (OMCs) due to stagnant regulated margins. These margins, which were last adjusted in October 2023, have remained unchanged for nearly three fiscal years, despite increasing stock-cover requirements and regulatory demands.

According to JS Global, the Economic Coordination Committee (ECC) has sanctioned a Rs1.22 per liter increase that has yet to be implemented, leaving the existing Rs7.87 per liter margin insufficient. This delay has contributed to a liquidity shortfall within the industry, further exacerbated by approximately Rs66.7 billion in unpaid Price Differential Claims and unresolved GST/input tax reimbursements.

The OMC industry has affirmed its commitment to the government's digitization objectives and has submitted a comprehensive three-year plan for implementation. However, industry representatives argue that linking the completion of this extensive program to the execution of the ECC-approved margin increase is unreasonable, particularly given the overdue nature of the adjustment.

The anticipated margin increase is expected to bolster the financial health and profitability of the sector. In the short term, it should provide a crucial boost to liquidity, potentially reducing dependence on short-term borrowing, especially for Pakistan State Oil (PSO).

OCAC is advocating for the immediate enactment of the approved margin increase, a resolution of overdue margins for fiscal years 2026 and 2027, and the establishment of a long-term regulatory framework. The council has requested an urgent meeting with senior government officials to address these pressing issues.