ISLAMABAD: The Oil Companies Advisory Council (OCAC) has urged Ogra propose structured and ring-fenced recovery through IFEM, by incorporating the approved per-litre digitization cost into each OMC’s notified cost structure. In a letter to Chairman Ogra, Secretary General OCAC has cited reference to the virtual meeting chaired by ‘your goodself’ on 14th January 2026 to deliberate upon key industry issues and operational challenges being faced by Oil Marketing Companies (OMCs). Of the seven agenda items discussed, the first two (i) Review of OMC Margins and (ii) Digitization Targets and Progress are of critical and immediate importance to the sustainability of the downstream petroleum sector. The OCAC has placed on record the industry’s serious concern regarding the non-notification of 50% of the ECC-approved OMC margin increase of Rs. 1.22 per litre for MS and HSD. As per our understanding, Rs. 0.61 per litre was intended to take effect from 15th December 2025, with the remaining 50% linked to achievement of digitization targets. READ MORE: ECC set to hike margins of OMCs, dealers During the abovestated meeting held on 14th January 2026, the industry was informed by your goodself that the Federal Cabinet has advised linkage of the entire margin increase with 100% digitization. While the industry remains fully committed to digitization, this revised linkage has effectively deferred implementation of even the already-approved immediate increase, thereby placing additional financial strain on OMCs. OMCs continue to operate under a regulated margin framework that has remained stagnant for over two years and does not reflect escalating costs related to operations, financing, compliance, and mandatory digitization initiatives. Accordingly, OCAC formally requests OGRA to plead the industry’s case, in coordination with MEPD, before the Federal Cabinet for immediate notification and incorporation of 50% of the approved margin increase (Rs. 0.61 per litre) in the MS and HSD price structure, with effect from 15th December 2025. OCAC has already shared the digitization cost recovery mechanism vide OCAC letter No. OGRA/208 dated 12 January 2026. To ensure timely, transparent, and equitable recovery of digitization investments, it is proposed that a dedicated escrow-type account titled “Digitization Fund” be created as a separate line item in the MS and HSD price structure, similar to existing statutory levies (PL and CSL). The proposed mechanism provides for milestone-based reimbursements, ensuring funds are released against verified implementation, including due compensation of the significant investments already made by OMCs in digitization. Under this mechanism: (i) the combined margin of Rs. 2.56 per litre for OMCs and dealers is proposed to be included in the price structure as a separate line item, split equally between MS and HSD (i.e. Rs. 1.28/-ltr each); (ii) Ogra and MEPD shall obtain the requisite approval from the ECC for inclusion of this separate line item and shall exercise joint oversight over the operation of the fund; and (iii) the account may be maintained as a savings account, with returns further supporting digitization initiatives. It has been recommended Implementation Framework in the following way (a) Immediate reimbursement (within 15 days of establishment of the mechanism) for the following, covering both capital and operational costs: (i) ATGs already installed at retail outlets over the period of past years; (ii) contributions made by OMCs towards the Raahguzar App; (iii) contributions made by OMCs and refineries towards the Track-and-Trace System : (b) setting an initial milestone of installation of ATGs at 10 retail outlets per OMC, with reimbursement to be initiated within 15 days of receipt and verification of requisite documentation; (c) continuation of the mechanism until 2030, in line with digitization timelines submitted by OMCs; and (d) Extension of the mechanism beyond completion for maintenance and future technological upgrades. In the event the proposed mechanism is not adopted, OCAC has proposed structured and ring-fenced recovery through IFEM, by incorporating the approved per-litre digitization cost into each OMC’s notified cost structure. In such a case, timely fortnightly recovery and reconciliation would need to be ensured by Ogra. We would appreciate early finalization of the above matters, given their critical importance to the financial viability, regulatory compliance, and uninterrupted supply operations of OMCs. OCAC remains available for any further clarification or deliberation as may be required. Copyright Business Recorder, 2026