By SKM
January 15, 2026
ISLAMABAD: Warning of mounting pressure on fuel supply operations, Oil Marketing Companies (OMCs) on Thursday proposed an escrow-based digitisation fund to recover billions of rupees invested in mandatory digital systems, as delays in notifying the ECC-approved margin increase continue to squeeze the downstream petroleum sector.
In a letter to the Chairman of the Oil & Gas Regulatory Authority (OGRA), the Oil Companies Advisory Council (OCAC) said the industry is facing “serious financial strain” after the government linked the entire OMC margin increase to 100 percent digitisation, effectively withholding even the portion earlier cleared for immediate implementation.
The ECC had approved an OMC margin increase of Rs. 1.22 per litre for Motor Spirit (MS) and High-Speed Diesel (HSD), with Rs. 0.61 per litre scheduled to take effect from December 15, 2025. However, industry representatives were informed during a January 14 virtual meeting chaired by the OGRA chairman that the Federal Cabinet has advised tying the full increase to completion of digitisation targets.
Industry sources said the decision has intensified liquidity pressures on OMCs already operating under a regulated margin regime that has remained unchanged for over two years, despite rising costs related to operations, financing, compliance, and technology upgrades.
To avert further strain, OCAC has proposed a dedicated “Digitisation Fund”, to be built directly into fuel prices as a separate line item, enabling transparent and milestone-based recovery of digitisation costs. The proposed mechanism would function through an escrow-type account jointly overseen by OGRA and the Ministry of Energy (Petroleum Division), subject to approval by the Economic Coordination Committee (ECC).
Under the proposal, a combined margin of Rs. 2.56 per litre for OMCs and dealers would be collected and ring-fenced exclusively for digitisation, split evenly between MS and HSD at Rs. 1.28 per litre each.
OCAC said the mechanism allows for immediate reimbursement within 15 days for investments already made, including Automatic Tank Gauges (ATGs) installed at retail outlets over previous years, contributions to the Raahguzar App, and funding by OMCs and refineries for the Track-and-Trace System.
The framework also sets near-term benchmarks, including installation of ATGs at 10 outlets per OMC, with verified reimbursements to follow within 15 days. The fund would remain operational until 2030, aligned with national digitisation timelines, and could be extended for system maintenance and future upgrades.
If the escrow-based model is not approved, OCAC has proposed an alternative ring-fenced recovery through the Inland Freight Equalisation Margin (IFEM), incorporating approved per-litre digitisation costs into each OMC’s notified cost structure with fortnightly reconciliation by OGRA.
The industry has urged OGRA, in coordination with the Petroleum Division, to take up the margin issue with the Federal Cabinet and immediately notify the already-approved 50 percent margin increase, warning that prolonged delays could affect supply logistics, inventory management, and overall fuel availability.
“The industry is not seeking concessions but implementation of approved decisions,” an industry official said. “Without regulatory certainty, sustaining uninterrupted fuel supply will become increasingly difficult.” OGRA officials were not immediately available for comment. Ends
