Oil-sector digitisation goal pushed to March 2027

The government has set the oil-sector digitisation target by March 23, 2027 in a bid to settle a row with the industry

During discussions in a recent meeting of the Economic Coordination Committee (ECC), the Petroleum Division presented the proposal and its background. The forum deliberated at length on various aspects of the case and agreed to take the digitisation target for petroleum dealers until March 23, 2027.

The ECC considered a summary dated August 11, 2026, submitted by the Ministry of Energy (Petroleum Division) and titled "Revision of Dealers' Margins on Petroleum Products – Motor Spirit (MS) and High-Speed Diesel (HSD)", and approved an increase in margins by Rs1.34 per litre based on the annual national Consumer Price Index (CPI) for 2023-24 and 2024-25 with a 5% floor and 10% ceiling. It withdrew the pre-condition of achieving the digitisation goal and set the target date of March 23, 2027.

The Petroleum Division mentioned that the ECC had considered a summary dated November 4, 2025 on the above subject and approved the proposal subject to following conditions: 1-Fifty per cent of the increase in margins will be effective from December 15, 2025 contingent upon a decreasing trend in petroleum product prices. 2-The remaining 50% of the proposed increase in margins will be subject to achieving the digitisation targets set by the Oil and Gas Regulatory Authority (Ogra) for the oil marketing companies (OMCs) and dealers. Also, the Petroleum Division will submit a progress report to the ECC by June 1, 2026.

The division told the ECC that the federal cabinet vide its decision in case No 212/26/2025 dated December 23, 2025 ratified the aforesaid decision of the Economic Coordination Committee with the modification that 100% (rather than 50%) of the increase in margins would be subject to meeting the digitisation targets.

The Petroleum Division pointed out that the digitisation initiative was currently being implemented by Ogra. However, following a strike call by the dealers' associations, the minister of petroleum held a meeting on July 22, 2026, which removed the digitisation pre-condition.

Representatives of the All-Pakistan Petrol Pump Owners Association and the Pakistan Petroleum Dealers Association, officials of the Ministry of Petroleum and Ogra chairman attended the meeting.

Both the associations demanded that their margins be delinked from the implementation of digitisation initiative, which was primarily the responsibility of the OMCs, adding that their current fixed margins (Rs8.64/litre on MS and HSD) be fixed as a percentage of consumer prices at the proposed rate of 8% (Rs26 to Rs31/litre). Following discussions, it was agreed that the issue relating to the increase in margins would be resubmitted to the ECC.

The Petroleum Division submitted its proposals for ECC's approval. These included an increase in dealers' margins by Rs1.34/litre based on the annual national CPI for 2023-24 and 2024-25 with a 5% floor and 10% ceiling, approved by the ECC in December 2025, which may be unconditionally granted and implemented with effect from September 1, 2026. Also, the division proposed a revision in OMCs' margins by Rs1.22/litre based on the annual national CPI for 2023-24 and 2024-25 with a 5% floor and 10% ceiling and it may continue to remain linked with the achievement of digitisation target set by Ogra.

The Petroleum Division solicited approval of the ECC. It pointed out that the summary had been sent to Ogra and the Finance Division for comments on July 31, 2026. The Finance Division conveyed its endorsement of the proposed increase in margins and suggested that instead of complete delinking, which may adversely affect the digitisation target, partial delinking may be considered to the extent of 75% of the hike. It was noted that despite the lapse of a considerable time, Ogra's comments were still awaited.