OCAC Slams Regulator Over Stagnant Margins Amid Digitization Push

The Oil Companies Advisory Council (OCAC) criticized the Oil and Gas Regulatory Authority for delaying an approved increase in oil marketing companies' margins, despite rising investment costs linked to digitization. OCAC urges urgent action to alleviate financial strains faced by companies operating on unchanged margins for more than two years.

The Oil Companies Advisory Council (OCAC) has delivered a scathing critique of the sector's regulatory body, accusing it of negligence in enforcing a government-sanctioned increase in profit margins for oil marketing companies. This criticism comes even as there is a demand for full recovery of investments made in digitization, which has significantly added to operational costs.

In a letter to the chairman of the Oil and Gas Regulatory Authority (OGRA), OCAC emphasized the lack of an official notice regarding the Economic Coordination Committee's (ECC) decision to raise margins for motor spirit (MS) and high-speed diesel (HSD) by 50%, effective December 15, 2025. The delay ties the increment to achieving comprehensive digitization, exacerbating the mounting financial pressure on companies enduring stagnant profits for over two years.

OCAC advocates for the creation of a 'Digitisation Fund' within the pricing of MS and HSD to manage and refund digitization investments. This proposed fund, overseen by OGRA and the Petroleum Division, would facilitate milestone-based reimbursements, addressing the financial burden on companies aiming for technological and operational upgrades.

(With inputs from agencies.)