Pakistan’s oil sector is once again in the spotlight as the Oil Companies Advisory Council (OCAC) and the Oil Marketing Association of Pakistan (OMAP) have rejected the government’s strict deadline for digital integration of the petroleum supply chain. The dispute arose after the Oil & Gas Regulatory Authority (Ogra) issued instructions to digitally integrate over 32,000 oil tanks, depots, and petrol pumps within a short 6–12 month period—without offering any compensation or cost recovery mechanism.

This article explains the controversy, industry concerns, financial challenges, required investments, government’s position, and what this dispute means for fuel supply, petrol prices, and regulatory reform in 2026.

What Is Digital Integration of Oil Supply Chain?

Ogra wants the entire fuel supply network to shift to a digital, real-time monitoring system called Auto Tank Gauging (ATG).

ATG Digital Integration System Includes:

Live tracking of every litre of petrol or diesel
Automated measurement of oil levels in tanks
Central dashboard visibility for Ogra
Remote monitoring of 16,000+ pumps
Tracking of oil tankers and depots

Ogra’s Deadlines

600 installations by Jan 31, 2026
All remaining installations by Jan 31, 2027
16,000 petrol pumps fully integrated by June 2026

The industry says these deadlines are unrealistic and impossible due to the massive cost involved.

Why the Oil Industry Rejected Ogra’s Deadline

The oil companies say the plan is good—but the government’s approach is dictatorial, rushed, and financially unrealistic.

Main Reasons for Rejection

No mechanism for Rs55–60 billion cost recovery
ATG hardware not available off-the-shelf
Each unit needs custom manufacturing
OMC profit margins stagnant for two years
Industry already spent millions on Track & Trace System with no results
Meeting with Ogra was a monologue, not a consultation

Rs55–60 Billion Cost: Why the Industry Cannot Pay

The industry claims it cannot afford the financial burden because:

1. Capital-Intensive Technology

Each ATG installation requires:

Sensors
Calibration tools
Communication devices
Dashboard connectivity
Custom-built systems for each tank

2. Import and Manufacturing Delays

ATG systems require:

Foreign components
Special production facilities
Long supply chain timelines

3. Stagnant Profit Margins

OMCs say:

“Margins have remained unchanged for two years. We cannot absorb new costs.”

4. Track & Trace System Failure

Companies paid millions for PITB’s system, but:

It is still incomplete
No outcome
No timeline
No functional dashboard

They fear ATG might become another failed, expensive project.

Industry Reaction: “Do They Want Us to Go Bankrupt?”

Industry executives were shocked by Ogra’s threatening tone. According to reports:

Ogra did not allow companies to speak
The chairman warned of punitive action
Companies felt humiliated
Industry leaders held an emergency internal meeting
They rejected the unilateral policy

One executive said:

“The industry will not foot this huge bill on its own. Do they want us to shut down?”

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OCAC’s Formal Protest Letter to Ogra

OCAC’s chairman, Adil Khattak, wrote a strongly worded letter highlighting:

Key Points Raised by OCAC

Meeting was a monologue, not a consultation
Repeated requests to speak were ignored
Industry wants a 5-year phased implementation plan
ATG units require long manufacturing time
Cost recovery must be finalised before implementation
OMC margins too low to invest billions
Track & Trace Phase II has zero progress despite huge payments

OCAC’s Recommended Timeline

Minimum 5 years
Gradual rollout
Government-funded or cost-shared model

OMAP’s Position – Smaller Companies at Greater Risk

OMAP represents smaller OMCs, which are more vulnerable. They say:

They cannot afford sudden multi-billion investment
Digital transformation needs government support
Rapid enforcement will hurt supply chain stability

Smaller companies fear:

Bankruptcy
Closure
Loss of market share
Fuel shortages in smaller cities

Government’s Position – A Push for Transparency

Petroleum Minister Ali Pervaiz Malik met industry representatives and assured them the regulator will:

Review concerns
Address technical challenges
Improve timelines
Reduce financial pressure
Move towards collaborative implementation

The government’s goal is:

Better monitoring
Curb fuel smuggling
Stop adulteration
Ensure real-time petrol availability data

But industry says the process must be practical and financially supported.

Big Question – Who Will Pay for Digital Integration?

The core dispute revolves around funding. Three possibilities exist:

1. Petroleum Companies Pay (Industry Rejects This)

They say:

Margins too low
Costs too high
No return on investment

2. Government Provides Subsidy

Possible through:

Petroleum levy adjustments
Federal budget
PSO-led digital model

3. Shared Cost Model

OMCs + Government + Retailers
This is the most likely outcome.

Impact on Consumers – Will Petrol Prices Increase?

If OMCs are forced to pay the cost, then:

Petrol prices may increase
Dealers may charge higher commissions
ATG installation costs may be passed to consumers

Industry warns:

“Without cost recovery, fuel prices will automatically rise.”

Impact on Petrol Pumps and Oil Tankers

Petrol Pumps

Need installation of ATG units
Require fibre/cellular connectivity
Need calibration and digital dashboards

Oil Tankers

Must be fitted with tracking devices
Need sensors and anti-theft systems

Depots

Must install high-tech measurement equipment

All these installations need time, money, and technical expertise.

Why Five Years Are Required – Industry’s Technical Argument

Industry says a realistic timeline must include:

Year 1: Feasibility & Design

Tank measurements
Custom hardware design
Vendor selection

Year 2: Pilot Projects

Test installations
Integration with Ogra dashboard

Year 3–5: Full Deployment

Import components
Install ATG nationwide
Training
Troubleshooting

This cannot be done in 6 to 12 months, according to experts.

Will This Dispute Affect Fuel Supply in Pakistan?

Possibly yes.

Risk Factors

OMCs may reduce operations
Investment freeze in new pumps
Delays in tanker movements
Possible fuel shortages if tensions escalate

But currently, the supply chain continues normally.

FAQs – Oil Industry Digital Integration 2025–26

1. What is Ogra demanding from the oil industry?

Full digital integration of petrol pumps, depots, and tankers using ATG systems.

2. Why are companies rejecting the deadlines?

Because the cost is Rs55–60 billion and the timeline is unrealistic.

3. Who will pay for ATG installation?

The government has not clarified this yet.

4. What is ATG?

Auto Tank Gauging – a digital system that measures fuel levels in real time.

5. Will petrol prices increase due to ATG?

Yes, if companies are forced to pay without compensation.