# Oil Sector Digitisation Deadline Extended to March 23, 2027
**ISLAMABAD:** The government has extended the deadline for achieving digitisation targets in the oil sector to **March 23, 2027**, effectively delinking petroleum dealers’ margins from the immediate completion of the digitisation process.
The decision was taken by the **Economic Coordination Committee (ECC)** during deliberations on a Petroleum Division proposal concerning the revision of dealers’ margins on Motor Spirit (MS) and High-Speed Diesel (HSD).
The ECC approved an increase of **Rs1.34 per litre in petroleum dealers’ margins**, based on the annual national Consumer Price Index (CPI) for 2023-24 and 2024-25, subject to a minimum floor of 5% and a maximum ceiling of 10%.
The committee also withdrew the condition that dealers must first achieve specified digitisation targets and set **March 23, 2027** as the new deadline for the sector’s digitisation.
The decision follows a dispute between petroleum dealers and the government over linking margin increases with the implementation of digitisation requirements.
### Background of the Dispute
The ECC had earlier approved the margin increase in November 2025, initially making half of the increase conditional on achieving digitisation targets set by the **Oil and Gas Regulatory Authority (OGRA)** for oil marketing companies (OMCs) and petroleum dealers.
The federal cabinet subsequently ratified the decision on December 23, 2025, with a significant modification: **100% of the margin increase was made conditional on meeting the digitisation targets**.
The Petroleum Division told the ECC that the digitisation initiative was being implemented by OGRA. However, tensions escalated after petroleum dealers announced a strike.
Following the development, the petroleum minister held a meeting with industry representatives on **July 22, 2026**, where the digitisation precondition was removed.
Representatives of the **All-Pakistan Petrol Pump Owners Association** and the **Pakistan Petroleum Dealers Association**, along with officials from the Petroleum Division and OGRA Chairman, participated in the meeting.
The dealers argued that digitisation was primarily the responsibility of the OMCs and should not be linked to their margins. They sought to have their existing fixed margin of **Rs8.64 per litre on both MS and HSD** converted into a percentage-based margin of around **8%**, equivalent to approximately Rs26–31 per litre.
Following the discussions, it was agreed that the issue of margin increases would be placed before the ECC again.
### Revised Margins Proposed
The Petroleum Division subsequently proposed that the **Rs1.34 per litre increase in dealers’ margins** approved in December 2025 be granted unconditionally and implemented from **September 1, 2026**.
It also proposed an increase of **Rs1.22 per litre in OMC margins**, calculated on the basis of the annual national CPI for 2023-24 and 2024-25, with the 5% floor and 10% ceiling.
Unlike the dealers’ margin, the OMC margin was proposed to remain linked to achievement of the digitisation targets set by OGRA.
The summary was circulated to OGRA and the Finance Division for comments on July 31, 2026. While the Finance Division endorsed the proposed margin increase, it cautioned against completely removing the digitisation condition.
Instead, it suggested **partial delinking of up to 75% of the margin increase**, arguing that complete delinking could undermine progress towards the sector’s digitisation objectives.
The Petroleum Division noted that OGRA’s comments were still awaited despite the passage of considerable time.
The ECC’s decision to extend the digitisation deadline to March 23, 2027 is expected to ease tensions with petroleum dealers while allowing the government and OGRA additional time to complete the sector-wide digitalisation process.
Story by Zafar Bhutta
