The federal government has revised the petrol pricing mechanism to address volatility caused by the Iran-US war, introducing a new formula for imported and locally refined petrol.
Under the revised system, import prices will be based on the actual cost of the relevant Pakistan State Oil (PSO) cargo. If the cost is unavailable, the premium, incidental expenses and customs duty of the latest available cargo will be used.
The government has also fixed these components at their March 7, 2026, levels for local refineries for 30 days, bringing ex-refinery prices below import prices. Refineries will be required to deposit the difference into the petroleum levy account, with the resulting benefit passed on to consumers through lower petrol prices.
However, the existing petroleum levy of Rs80 per litre will remain unchanged. The government has also incorporated a premium differential of $2.950 per barrel per day into petrol pricing to help moderate price fluctuations.
The changes apply only to petrol, while the pricing mechanism for other petroleum products remains unchanged.
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