The oil industry has formally requested an increase in the margin for oil marketing companies (OMCs) to Rs. 10 per litre—an upward revision of 27 percent from the current margin of Rs. 7.87 per litre.

In a letter addressed to the Minister for Petroleum, the Oil Companies Advisory Council (OCAC) reminded the government that in June 2024, the industry had originally proposed a Rs. 12.65 per litre margin. This recommendation was based on actual financial pressures including costs associated with maintaining a 20-day fuel stock, turnover tax, handling losses, demurrage charges, unadjusted GST through June 2024, and other operational expenses. After consultations with the Petroleum Division and the Oil and Gas Regulatory Authority (OGRA), the industry revised its request to Rs. 10 per litre.

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Additionally, the council requested reimbursement of demurrage and unadjusted GST via the Inland Freight Equalisation Margin (IFEM). While the Economic Coordination Committee had earlier approved the GST recovery through IFEM, the margin increase was not considered, prompting the OCAC to press for immediate approval to avoid further financial strain on the sector.

The OCAC also called for the formal inclusion of GST exemption in the upcoming Finance Bill 2025, emphasizing that both the revision in margins and the GST relief are crucial to safeguarding the financial stability of the downstream oil sector and ensuring a continuous nationwide fuel supply.