Pakistan Revises Petrol Pricing Mechanism for Refineries
Government fixes refinery margins at pre-war levels for 30 days, directing refineries to surrender the price differential through Petroleum Levy for consumer relief. The oil refineries have protested over such certain change in oil pricing formula.
The federal government has revised Pakistan’s petrol pricing mechanism during the Iran-US war, directing domestic refineries to maintain specified pricing components at pre-war levels for the next 30 days.
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According to a Petroleum Division notification issued on October 30, 2026, the Federal Cabinet approved the revised mechanism following consideration of a summary submitted by the Petroleum Division on the same date.
Under the decision, petrol’s import price may be determined using the actual import cost of the relevant Pakistan State Oil (PSO) cargo. However, where the actual import cost is unavailable for daily pricing, authorities may use the premium, incidentals and customs duty of the last available cargo to determine the import price.
The government has also directed refineries to calculate their ex-refinery petrol prices by fixing premium, incidentals and customs duty at the levels effective on March 7, 2026. These pre-war pricing components will remain applicable for the next 30 days under the revised arrangement.
The notification states that the difference between the import price determined under the revised mechanism and the ex-refinery price calculated using pre-war components must be surrendered by refineries under the Petroleum Levy head of account C03901.
The resulting benefit from this Petroleum Levy adjustment will be passed on exclusively to motor spirit (MS) consumers through a corresponding reduction in petrol prices.
The Petroleum Division has instructed all refineries to deposit the differential Petroleum Levy into account C03901. Deposits must follow the amounts specified in Oil and Gas Regulatory Authority (OGRA) price notifications and Petroleum Levy notifications issued from time to time.
The government has also introduced daily reporting requirements to ensure verification and reconciliation of domestic petrol sales.
Under the notification, refineries must submit daily reports of domestic motor spirit sales, accompanied by Computerised Payment Receipts (CPRs) or challans, to the Petroleum Division and OGRA.
The reporting requirement will enable the relevant authorities to verify deposited levy amounts against reported domestic sales and reconcile the resulting figures.
The directive has been circulated to the chief executives and managing directors of Pak-Arab Refinery Limited, Pakistan Refinery Limited, Attock Refinery Limited, National Refinery Limited, Cnergyico Refinery Limited and ENAR.
The notification was issued by the Directorate General of Oil, Ministry of Energy’s Petroleum Division, under reference number PL-3(457)/2026-86. It was signed by Awais Jamil, Financial Analyst.
Copies were also forwarded to the secretaries of Petroleum and Finance divisions, the additional secretary for policy, OGRA chairman, director general oil and relevant officials.
The revised arrangement establishes a 30-day mechanism for handling petrol pricing differences during the Iran-US war. It links refinery pricing adjustments directly with Petroleum Levy deposits and corresponding reductions for domestic petrol consumers.
The notification does not specify the expected reduction per litre or the total financial value of the adjustment. It also does not provide a separate implementation schedule beyond the approved 30-day period.
