Government approves new petrol pricing method for next 30 days
The Petroleum Division has issued a new formula to refineries after cabinet approval, amid Iran-US tensions. It applies for 30 days and aims to pass the petroleum levy benefit to petrol consumers.
For information only, not investment advice. Prices change quickly: check the time and source of every figure.
- New petrol pricing method applies for 30 days after cabinet approval.
- Refineries must deposit the gap between import and ex-refinery prices under the petroleum levy.
- The levy change benefit will go only to petrol consumers as a price reduction.
- Final talks with Jamaat-e-Islami on the levy are due on 3 November.
The government has changed the way petrol prices and the petroleum levy are determined, amid tensions between Iran and the United States. According to Express News, the new method will apply for the next 30 days. Daily Pakistan reported that the government approved the formula to avoid increases in petrol prices.
After cabinet approval, the Petroleum Division issued the new formula to refineries through official letters sent to all oil refineries. Under it, the import price of petrol will be based on the cost of PSO's actual import cargo. If the actual import cost is not available, refineries may use the premium and additional costs of the last cargo.
For the next 30 days, refineries may keep their ex-refinery petrol price at the level of 7 March 2026. Premium, additional costs and customs duty for local refineries may also stay at that level, which reports describe as the pre-war level.
Refineries must deposit the difference between the import price and the ex-refinery price under the petroleum levy. According to Dunya News, as cited by Daily Pakistan, this money goes into the government levy account, and the petroleum levy per litre will be reduced by an amount equal to the extra sum deposited.
Express News reported that the benefit of the levy change will be passed only to petrol consumers, in the form of a petrol price reduction. Daily Pakistan said the formula is expected to help control unusual increases in petrol prices and prevent refineries from making unusual profits.
Refineries have been directed to give the Petroleum Division and OGRA daily petrol sales details, along with CPRs and challans. OGRA and the Petroleum Division will verify payments of the additional levy and the accounts.
On import costs, the reports say current petrol prices include an import premium of 19.88 dollars per barrel. The premium on cargoes arriving in November may reach 28 to 35 dollars per barrel, according to Express News, while Daily Pakistan gave a figure of up to 35 dollars. Daily Pakistan reported that petrol could become 50 rupees per litre more expensive due to the tensions. Express News said final talks between the government and Jamaat-e-Islami on the petrol levy are to be held on 3 November.
Why it matters
Changes to how petrol prices are set affect what motorists in Pakistan pay at the pump. The reports say the levy change is meant to pass its benefit to petrol consumers.
