OGDC, PPL, Mari Petroleum and POL reverse Rs77.8 billion in prior-year super tax provisions, lifting combined reported profit growth to 30.9%
KARACHI: Pakistan’s listed exploration and production (E&P) companies posted a sharp increase in reported earnings during FY2026, largely driven by the reversal of super tax provisions relating to prior years, according to research by Arif Habib Limited (AHL).
Oil and Gas Development Company Limited (OGDC), Pakistan Petroleum Limited (PPL), Mari Petroleum Company Limited (MARI) and Pakistan Oilfields Limited (POL) collectively reversed Rs77.8 billion in previously recognised super tax provisions during FY26.
The reversal directly boosted reported profits. A further Rs53 billion remains provided for while the companies continue discussions with the Commissioner of Inland Revenue, with the provisions expected to be reassessed as the relevant tax proceedings progress.
Constitutional Court ruling
AHL said the Federal Constitutional Court of Pakistan has ruled that super tax imposed under Sections 4B and 4C of the Income Tax Ordinance, 2001, read with Rules 4AA and 4AB of the Fifth Schedule, cannot push E&P petroleum income above the aggregate tax rate prescribed under the Schedule and each company’s Petroleum Concession Agreement (PCA).
The ruling has significant implications for the sector’s tax liabilities and the treatment of previously recognised super tax provisions.
Reported earnings rise 30.9%
The combined earnings per share (EPS) of OGDC, PPL, MARI and POL increased by 30.9% year-on-year on a reported basis in FY26.
However, excluding the impact of super tax reversals, combined EPS growth was considerably lower at 8.8%, indicating that the one-off tax reversals were a major contributor to the reported earnings increase.
OGDC recorded the strongest reported earnings growth among the four companies at 42.7%, followed by MARI at 33.7% and POL at 32.0%. PPL posted comparatively modest reported growth of 7.1%.
On an ex-super-tax basis, OGDC’s earnings increased 12.8%, while POL and MARI recorded growth of 24.9% and 7.3%, respectively. PPL, however, reported a 1.7% decline.
FY26 profit comparison
Combined profit after tax for the four E&P companies rose from Rs351.25 billion in FY25 to Rs459.89 billion in FY26 on a reported basis.
Excluding the impact of the super tax reversals, combined FY26 profit after tax stood at approximately Rs382.14 billion.
OGDC’s reported profit increased from Rs169.90 billion in FY25 to Rs242.37 billion in FY26, compared with Rs191.61 billion after excluding the super tax reversal.
PPL’s profit rose from Rs92.03 billion to Rs98.53 billion, while its FY26 profit excluding the reversal stood at Rs90.42 billion.
MARI’s profit increased from Rs65.13 billion to Rs87.07 billion, with ex-super-tax profit at Rs69.89 billion. POL’s profit rose from Rs24.18 billion to Rs31.92 billion, compared with Rs30.21 billion excluding the reversal.
The figures highlight the distinction between underlying operating earnings and reported profitability, with the super tax reversals providing a substantial one-off boost to the sector’s FY26 bottom line.