Petroleum Division Petrol Pricing Mechanism
The prices of petrol and diesel will now be determined based on the actual import cost of the cargo procured by Pakistan State Oil (PSO). The Federal Government has decided that the benefit of any price reduction will be passed directly to the public in the form of relief.
In light of directives from the Federal Cabinet, the Petroleum Division has corresponded with oil refineries, and responses have been received. Given the tensions between Iran and the United States, the Petroleum Division has revised the mechanism for determining petrol prices and has instructed the oil refineries to implement a new formula, in accordance with the Federal Cabinet’s decision.
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Petrol Import Cost Calculation
Where the actual cost of an import is not available for determining the daily price, the last available cost inclusive of premiums, incidental charges, and custom duties may be used as the basis for determining the import price.
These entities shall be entitled to recover the ex-refinery price of petrol for the subsequent 30 days, calculated by incorporating premiums, incidental charges, and custom duties based on the rates applicable as of March 2026.
Petroleum Levy Adjustment Rules
The difference between the fixed import price of the first shipment and the fixed ex-refund price of the second shipment will be deposited by the Refani in the Petroleum Levy Account Head, Phase 390. The benefit derived from the adjustment of the Petroleum Levy collected will be passed on to the Motor Separate i.e. the along with the Petrol without any hindrance through a similar reduction in the price of Petrol.
To implement the aforementioned decision, all refineries are advised to deposit the Petroleum Levy—as specified in the notifications issued from time to time by the Oil and Gas Regulatory Authority (OGRA)—into the government treasury.
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Refineries are required to submit reports on their domestic sales of Motor Spirit (MS), along with the relevant challans, to the Petroleum Division and OGRA for necessary verification and reconciliation. The practice of daily price determination is being discontinued; instead, pricing will be set on a monthly basis. Currently, this is being implemented for a 15-day period, after which a decision will be made regarding whether to continue this process and what further adjustments, if any, are required.
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