ISLAMABAD: The federal government has introduced a new petrol pricing formula for the next 30 days amid escalating tensions between Iran and the United States, aiming to manage rising import costs and pass any benefits from petroleum levy adjustments directly to consumers.
The Petroleum Division issued the revised pricing mechanism to oil refineries following approval from the federal cabinet, according to sources.
Under the new formula, the import price of petrol will be calculated using the actual cost of cargoes imported by Pakistan State Oil (PSO).
If the actual import cost is unavailable, refineries will be allowed to use the premium and additional charges associated with the most recent imported cargo to determine the price.
Sources said domestic oil refineries would be permitted to calculate petrol’s ex-refinery price using the rates prevailing on March 7, 2026, for the next 30 days.
The government has also allowed refineries to maintain import premiums, additional expenses and customs duties at their March 7 levels, before the escalation of regional hostilities.
The revised mechanism is intended to address fluctuations in international petroleum import costs arising from tensions between Iran and the United States.
According to sources, any difference between the actual import price and the ex-refinery price calculated under the revised formula must be deposited by refineries under the petroleum levy.
The government has decided that the financial benefit arising from petroleum levy adjustments will be passed exclusively to petrol consumers.
Any benefit generated through the revised levy mechanism will be reflected in reduced petrol prices, rather than being retained by refineries.
The Petroleum Division has formally communicated the new instructions to all oil refineries and directed them to submit daily petrol sales reports to the division and the Oil and Gas Regulatory Authority (OGRA).
Refineries will also be required to provide computerised payment receipts (CPRs) and challans alongside their daily sales reports.
OGRA and the Petroleum Division will verify the calculations and payments associated with the additional petroleum levy to ensure compliance with the revised pricing arrangement.
The new mechanism will remain effective for 30 days.
Sources indicated that import premiums on petrol cargoes arriving in Pakistan during November could increase to between $28 and $35 per barrel.
The premium currently incorporated into petrol prices stands at $19.88 per barrel, highlighting the potential increase in import-related costs.
For domestic refineries, premiums, additional charges and customs duties will remain linked to the March 7, 2026, benchmark throughout the temporary pricing period.
The revised formula comes as regional tensions continue to affect petroleum markets, creating uncertainty over import costs and domestic fuel pricing.
The government expects the temporary arrangement to regulate the impact of higher import premiums while ensuring that any benefit from petroleum levy adjustments reaches petrol consumers.