Islamabad, Oct 11: OMC Margins to Increase Soon, Says OGRA
Oil and gas regulatory bodies (OGRAs) have suggested raising oil marketing companies’ (OMCs’) and petroleum dealers’ profit margins.
OGRA suggested increasing the margin on high-speed diesel (HSD) and MS petrol for OMCs from Rs. 7.87 per litre to Rs. 9.88 per litre in a letter to the Petroleum Division.
The Authority has requested that the margin for petroleum dealers be increased from Rs. 8.64 to Rs. 10.01 per litre for both HSD and MS.
According to OGRA, the proposed OMC Margins increase comprises an extra 0.5 rupees per litre for OMCs and 0.25 rupees for dealers to cover costs associated with the next three years of gasoline pump automation and digitization.
In an effort to alleviate financial strain, the oil industry has been a proponent of increased margins. The Oil Companies Advisory Council (OCAC) lists high financing costs, sales tax exemptions, gasoline smuggling, and narrow profit margins as some of the major issues facing the sector.
OCAC stressed in a recent letter to OGRA that the margins are out of date, with the most recent revision having been made in September 2023.
Following lengthy negotiations between OGRA, the Ministry of Energy, and OMC representatives, the decision was made.
Because they limit the profits that OMCs may generate from selling petroleum products, OMC margins are a crucial component of the oil business.
These margins have been under examination for a number of years, and stakeholders have been putting pressure on them to rise in order to offset growing operating expenses and inflationary pressures.
