Pakistan’s Oil and Gas Regulatory Authority (Ogra) has ordered the entire energy sector to adopt digital payments by October 31, 2025. This move aims to promote a cashless economy, increase transparency, and curb tax evasion, marking a major step in the government’s “war on cash.”
The Mandate: A Digital Revolution
The Oil and Gas Regulatory Authority (Ogra) has issued a landmark directive ordering all licensed entities in the oil and gas sector to switch to digital payment solutions by October 31, 2025. This includes oil marketing companies, gas utilities, CNG stations, LPG and LNG operators, refineries, and lubricant marketers. The core of the mandate requires these businesses to prominently display and accept digital payment options, especially the Raast QR code, a national instant payment system.
While customers will still have the option to pay with cash, businesses are now legally bound to accept digital transactions. This is a significant shift from the past, where many businesses, despite legal requirements, resisted digital payments and issued manual invoices. The new directive applies to the entire value chain, from production and refining to retail sales, ensuring a comprehensive move towards a cashless system across the energy sector.
The Background: A “War on Cash”
This directive is part of a broader government initiative to curb the shadow economy, a long-standing issue in Pakistan. The decision has been under consideration for some time, with the government explicitly labeling its campaign a “war on cash.” The ultimate goal is to increase financial inclusion, improve transparency, and enhance operational efficiency. By making digital payments mandatory, the government aims to create a traceable trail for every transaction. This will make it much harder for businesses to under-report their income and evade taxes.
Ogra’s decision is strategically timed and complements other governmental efforts, such as the push for legislation to introduce digital tracking of petroleum products. This tracking system, from import to retail, is specifically designed to combat smuggling and adulteration, which cause an estimated annual revenue loss of Rs300-500 billion and contribute to environmental damage. The shift to digital payments is a key piece of this larger strategy, creating a parallel system of accountability that strengthens the government’s ability to monitor and regulate the energy sector.
The Impact: Lessons from Abroad
The move towards a cashless system in the energy sector is expected to have several key impacts:
- Increased Transparency: For the first time, a large portion of daily transactions will be recorded digitally. This will provide regulators and tax authorities with real-time data, making it easier to identify discrepancies and combat tax evasion.
- Enhanced Financial Inclusion: By promoting digital payment solutions like the free-of-cost Raast QR code, the government is making it easier for people without bank accounts to participate in the formal economy. Mobile payment options will serve as a bridge for a large unbanked population.
- Cost-Effectiveness: Unlike traditional Point-of-Sale (POS) systems that require investment in hardware and maintenance, QR code solutions are cheap and easy to implement. This low-cost barrier makes it feasible for small businesses and petrol pumps, even in remote areas, to adopt digital transactions.
- International Precedent: Authorities have explicitly cited the success of similar measures in countries like India, Indonesia, and Bangladesh. These nations have seen a significant expansion of cashless transactions by promoting QR codes and mobile payments, providing a clear roadmap for Pakistan’s initiative.
This policy shift is more than just a regulatory change; it is a fundamental step towards modernizing Pakistan’s financial infrastructure. By leveraging digital technology, the government hopes to create a more transparent, efficient, and inclusive economy. This mandate, if successfully implemented, could set a precedent for other sectors to follow suit.
