ECC approves Rs1.34 per litre increase in petrol and HSD dealers’ margin from September 1, raising concerns over higher fuel costs.
ISLAMABAD: Consumers may face another increase in fuel prices after the Economic Coordination Committee (ECC) approved a Rs1.34 per litre increase in the dealers’ margin on petrol and high-speed diesel (HSD), according to a report by Topline Securities Limited.
The increase will raise the dealers’ margin from Rs8.64 per litre to Rs9.98 per litre, representing an increase of around 15.5 per cent. The revised margin is expected to take effect from September 1, 2026.
The decision follows the Pakistan Petroleum Dealers Association (PPDA) announcing a nationwide strike from August 15, which was subsequently called off.
Dealer margin increase pending since December 2025
According to Topline Securities, the increase in the dealers’ margin had been pending since December 2025, when the ECC initially approved the revision.
However, the federal cabinet had linked implementation of the increase to the Oil and Gas Regulatory Authority’s (OGRA) digitisation targets.
Petroleum dealers opposed the condition, arguing that digitisation was largely the responsibility of oil marketing companies (OMCs).
The latest ECC decision effectively separates the dealers’ margin increase from the digitisation condition, paving the way for implementation from September.
OMC margin remains unchanged
The Topline Securities report noted that the OMC margin remains unchanged at Rs7.87 per litre.
The ECC had previously approved a Rs1.22 per litre increase in the OMC margin, with Rs0.61 per litre initially proposed for implementation from December 2025 and the remaining amount linked to digitisation, with a target for completion by June 2026.
However, the federal cabinet subsequently linked implementation of the full increase to achieving 100 per cent digitisation. Neither component has been notified so far.
OMC margin increase may follow
Topline Securities believes the latest decision on the dealers’ margin has increased the likelihood of notification of the pending OMC margin increase.
Both the dealer and OMC margin revisions were approved under the same summary and were based on FY2024-25 Consumer Price Index (CPI) indexation.
“With the dealer margin now settled, we see a higher chance of approval of the pending OMC margin revision,” the brokerage said, noting that the revision has remained outstanding for nearly three years.
The last OMC margin increase was implemented in October 2023, when the margin was raised from Rs6.00 per litre to Rs7.87 per litre.
Potential impact on oil sector and consumers
Topline Securities has conducted a sensitivity analysis to assess the potential earnings impact of the pending OMC margin increase.
Any increase in the OMC margin, if approved and notified, could further raise the cost structure of petroleum products. The additional cost could potentially be passed on to consumers through higher retail fuel prices.
The latest increase in the dealers’ margin therefore raises concerns about a further fuel price burden for consumers, particularly if the pending OMC margin revision is also implemented.
The impact on pump prices will ultimately depend on how the revised margins are incorporated into the petroleum pricing structure and whether the additional costs are passed through to consumers.