KARACHI: The digitisation of the downstream sector will cost the oil industry more than Rs50 billion as companies move to upgrade retail outlets across the country. The industry has called on the government to introduce a cost recovery mechanism to support the transition.
Under the government’s initiative for digitisation and modernisation of the downstream sector, petrol stations nationwide will be required to offer QR codes, debit and credit card facilities, and mobile payment options alongside cash transactions.
“The initiative is long-term and capital-intensive in nature. For oil marketing companies (OMCs) to develop a realistic and workable implementation plan with clear timelines, it is imperative that the Oil and Gas Regulatory Authority (Ogra) provides the necessary guidelines, including specific requirements, technical specifications of equipment, and a cost recovery mechanism,” the Oil Companies Advisory Council (OCAC), the representative body of the oil sector, said in a letter to the Ogra chairperson.
The council said the industry remains fully aligned with the government’s vision for digitisation and modernisation of the downstream sector. In the first phase of digitisation, the OCAC developed the Raahguzar mobile application to assist the Federal Board of Revenue (FBR) and Ogra. The app was handed over to Ogra in January 2025, with all development costs borne by OMCs.
The second phase is now under way. OCAC members have made the required payments and are coordinating with the Punjab Information Technology Board (PITB) and Ogra to ensure effective and timely completion.
Responding to Ogra’s advice for OMCs to share a work plan for digitisation and the integration of nozzle sales and auto tank gauges (ATG) on underground tanks, the OCAC said some companies have already digitised parts of their networks in line with their business plans. Around 1,500 retail outlets have been fully or partially digitised, but more than 11,000 still need upgrading.
The cost implications are substantial. A digital dispenser costs about Rs2.5 million per unit, while ATG equipment for a retail outlet with two storage tanks costs around Rs5 million. Moreover, ATGs are custom-made according to tank design and capacity, creating challenges in terms of global availability.
“The overall cost of the project for the industry is estimated to exceed Rs50 billion,” the OCAC said.The council stressed that a clear regulatory framework and cost recovery mechanism were critical for the project’s viability. “The OCAC and its member companies remain committed to extending full cooperation and working closely with Ogra for the successful execution of this important national initiative,” the letter stated.
