KARACHI: Pakistan’s Economic Coordination Committee (ECC) is considering a proposal to raise margins for Oil Marketing Companies (OMCs) by up to PKR 1.63 per liter, according to reports. This potential adjustment, which amounts to a 14-21% increase from the current PKR 7.87 per liter, would be the first change in margins in two years, as past revisions have been delayed.

The proposed increase, if approved, could significantly impact the earnings of major players such as Pakistan State Oil (PSO) and Attock Petroleum Limited (APL). An increase of PKR 1.63 per liter is projected to boost annual earnings per share (EPS) by approximately PKR 12.8 for PSO and PKR 13.1 for APL. A more conservative adjustment of PKR 1.05 per liter would have a smaller, yet notable, effect on EPS, raising it by around PKR 8.3 for PSO and PKR 8.4 for APL.

AKD Securities Limited, the source of this analysis, has not yet factored these potential changes into their estimates, pending formal approval. Their base case predicts a margin increase of PKR 1.18 per liter by January 2026, though this remains speculative until the ECC reaches a decision.

For PSO, a rise in rupee margins could enhance cash profits, potentially offsetting liquidity challenges as gas revenues improve. Analysts at AKD Securities have issued a ‘BUY’ recommendation for both PSO and APL, forecasting a target price of PKR 760 per share for PSO and PKR 750 for APL by June 2026, with expected dividend yields of 3.3% and 4.6%, respectively.

The proposed margin adjustments come as part of a broader economic strategy to align OMC margins with the Consumer Price Index (CPI), reflecting a historically consistent approach that has been deferred in recent years. The outcome of the ECC’s decision will likely set the course for OMC financial performance in the coming fiscal years.