ISLAMABAD (Kashmir English): The federal government has changed the formula for determining petrol prices during the ongoing tensions between Iran and the United States, which will remain in effect for the next 30 days.
According to sources, the Petroleum Division has issued the new pricing mechanism to oil refineries following cabinet approval and ordered immediate implementation.
Under the new formula, the import price of petrol will be calculated based on the actual cost of the relevant PSO’s import cargo instead of relying solely on the prevailing pricing benchmark. If the original import cost is unavailable, the premium and additional costs of the most recent cargo will be used.
In addition, the notification added that the refineries will be allowed to set the ex-refinery price of petrol at the level of the price effective for March 7, 2026 (pre-war) for the next 30 days.
Sources said the difference between the import price and the ex-refinery price would be deposited by refineries as a petroleum levy. The benefit generated through the change in the levy will be passed on exclusively to petrol consumers in the form of a price reduction.
It added that the benefit of the change in the petroleum levy will be passed on only to petrol consumers through a corresponding reduction in the price of petrol.
It also urged refineries to report their domestic petrol sales along with CPRs/challans every day so the government can verify and reconcile the amounts deposited.
Petroleum levy reduced
Under OGRA’s revised price calculation, Rs14.71 per litre of the Petroleum Levy is reflected as a refinery-surrendered component, reducing the levy charged directly in the petrol price calculation to Rs65.29 per litre against the stated levy of Rs80 per litre.
However, the notified retail price of petrol remained unchanged at Rs377.91 per litre.
The distinction is important because the new formula changes both how much refineries receive for locally produced petrol and how the government accounts for the financial benefit intended for consumers, without necessarily resulting in an equivalent reduction in the price paid at the pump.
The import premium on petrol cargoes arriving in Pakistan in November is expected to reach $28 to $35 per barrel, compared to the current $19.88 per barrel premium included in petrol prices.
Premium surcharges and customs duties for local refineries will remain at the pre-war level of March 7, 2026.
