Formula For Setting Petrol Prices For Refineries Changed
Sajid Ali
Published November 01, 2026 | 09:30 PM
The Petroleum Division’s Directorate General Oil has written to OGRA regarding a new petrol pricing mechanism based on the actual cost of PSO’s imported cargo.
ISLAMABAD, (UrduPoint / Pakistan Point News - 1st Nov, 2026) The federal government has modified the system for determining petrol prices for the country’s oil sector and refineries. The Petroleum Division of the Ministry of Energy, through the Directorate General Oil, has sent an official letter to OGRA outlining the new petrol pricing mechanism.
According to media reports, the new petrol pricing formula has been formally approved by the federal cabinet. Under this system, the import price of petrol in Pakistan will be calculated based on the actual current cost of cargo imported by Pakistan State Oil (PSO). If the actual cost is unavailable immediately, the price of the last available cargo will be used as a reference.
The most significant change concerns the pricing of refineries. Refineries will be permitted to retain the petrol premium and other costs at the level prevailing before the Iran-US war for the next 30 days. The factory-gate, or ex-refinery, price of petrol for refineries will be determined based on the premium and customs duty at the level prevailing on 7th Mar, 2026.
In simpler terms, this technical change means that any difference or savings between the imported petrol price and the price of locally refined petrol will no longer benefit refineries. Instead, the amount will be deposited directly into the national exchequer’s petroleum levy account.
Sources in the Ministry of Energy state that refineries had been charging a significantly higher premium compared to imported petrol, especially after tensions between Iran and the United States. However, freezing prices at the 7th Mar level will make refinery petrol cheaper and imported petrol more expensive. Consequently, refineries will need to deposit an amount equivalent to the price difference into the levy account to align their petrol prices with imported prices.
The existing petroleum levy rate of Rs80 per litre will remain unchanged and will not be directly linked to any relief or reduction for consumers.
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