Pakistan’s oil refineries have warned that the government’s revised petrol pricing mechanism forces them to sell below production cost, calling it a serious setback imposed without consultation. The Express Tribune reported on 1 November that the federal cabinet decided on Friday night that a Rs14.71 per litre cut in the petroleum levy would be offset by a Rs49 per litre contribution from refineries to the levy account.
Under a Petroleum Division letter issued on 30 October, refineries will receive an ex-refinery petrol price calculated by fixing the premium, incidentals and customs duty at their 7 March 2026 levels for the next 30 days. The difference between the import price based on Pakistan State Oil’s actual import costs and the revised ex-refinery price must be surrendered to the levy account. Attock Refinery’s chief executive said refineries had already twice agreed to cap their spread on high-speed diesel, and now face yet another serious loss.
The dispute matters for fuel supply: if refineries say the formula is unworkable, the argument moves from pump prices to whether local refining stays viable. No change to retail petrol prices follows from the refineries’ protest itself.
Sources: Express Tribune, Business Recorder. Written in our own words for information only.