A worker holds a fuel nozzle to fills fuel in a car, after the government announced the increase of petrol and diesel prices, at petrol station in Karachi, Pakistan September 16, 2023. REUTERS/Akhtar Soomro/File photo
Pakistan’s oil marketing sector is heading towards forced exits unless all issues are addressed soon, Dubai-based advisory firm Mountain Ventures said in a report.
The country’s oil sector now mirrors the failures seen earlier in the US airline industry, where excessive fragmentation resulted in collapsing margins, underinvestment, repeated bankruptcies and forced mergers.
According to the report, consolidation in the oil marketing sector is unavoidable. The key risk is whether it occurs early and in an orderly fashion, or later through financial stress, company exits and market disruption.
Pakistan currently has 44 licensed oil marketing companies, but market activity is heavily concentrated. Just three OMCs account for 60 percent of total sales volumes, the top ten control 95 percent, and the top twenty account for 98.5 percent.
The sector recorded strong volume growth in 2025, with combined sales of gasoline, gasoil, and high-octane increasing by around 10 percent YoY to 15.4 million metric tons. But higher volumes failed to translate into improved profits.
Regardless, the entry of global fuel brands like Aramco, Gunvor and Wafi Energy in Pakistan is expected to reshape competition because fuel prices remain regulated here. These companies are likely to compete more and change the game.
The report concludes that future outcomes will depend less on demand growth and more on scale, balance-sheet strength, and execution.