KARACHI: Pakistan’s oil industry has urged the Oil and Gas Regulatory Authority (Ogra) to finalise a practical and financially sustainable cost-recovery plan for nationwide fuel retail digitalisation, warning that the sector cannot proceed without a clear cost-sharing framework due to the substantial investment required.
In a letter addressed to the Ogra chairperson on Tuesday, the Oil Companies Advisory Council (OCAC) said the industry fully supports the government’s digitalisation initiative—including the installation of auto tank gauging (ATG) systems at fuel stations—but stressed that implementation is impossible without a viable mechanism to recover costs.
The OCAC expressed concern over the December 1 online meeting held by Ogra with OMC CEOs, noting that the discussion “proceeded largely as a monologue,” and that its attempts to present the industry’s position “were repeatedly disregarded.”
The council reiterated that digitising retail outlets and installing ATG equipment requires a phased rollout and a realistic timeline of at least five years given the nationwide scale. Each ATG system, it noted, is capital intensive and custom-built according to specific tank configurations, requiring significant time for procurement, installation and calibration.
Industry estimates show a single digital dispenser costs around Rs2.5 million, while a complete ATG system for a two-tank outlet can cost up to Rs5 million. The total financial exposure across all outlets nationwide is expected to exceed Rs50 billion.
“Imposing obligations of this magnitude without a cost-recovery mechanism is impractical, unsustainable, and risks destabilising the downstream sector,” the OCAC warned, adding that OMC margins have remained stagnant for two years, limiting their ability to absorb additional costs.
The industry also noted that despite spending millions of rupees on the Phase II track-and-trace system under the Punjab Information Technology Board (PITB), there has been no progress, no completion timeline, and no visible outcome. Meanwhile, OMCs are being directed toward multiple new compliance initiatives without a coherent implementation roadmap.
Calling for urgent intervention, the OCAC asked Ogra to adopt a holistic view of the issue and immediately finalise an implementable cost-recovery mechanism. It requested Ogra to share the proposed framework as soon as possible and schedule a dedicated meeting to hear the industry’s concerns and operational constraints.
Story by Tanveer Malik
