Pakistan has overhauled its petroleum pricing mechanism, moving to daily, market-linked fuel prices while imposing stricter compliance conditions on oil marketing companies (OMCs) tied to import and refinery uplift commitments.
Under the new system, the Oil and Gas Regulatory Authority (OGRA) will determine and publish ex-depot prices for Motor Spirit (MS) and High-Speed Diesel (HSD) on a daily basis, calculated using a seven-working-day rolling average of Platts Arab Gulf assessments for MS-92 RON and HSD 10 ppm.
Prices announced on Fridays will remain in effect through Saturday and Sunday. OGRA can now issue daily prices without prior approval from the federal government or the prime minister, though each publication will be reported to the DG Oil office.
To support transparency, the regulator has also been directed to publish daily Platts benchmark assessments on its website starting July 1, 2026, allowing comparison with domestic rates.
The mechanism changes how import costs are factored into pricing. If Pakistan State Oil (PSO) imports motor spirit during the preceding seven working days, the weighted average of actual premiums, incidentals and customs duty from those cargoes will apply.
In the absence of imports during that period, the calendar year-to-date average of these costs will be used instead. Where PSO holds a long-term supply agreement, such as with OQ Trading Oman, the premium under that contract will apply whenever no imports occur in the relevant window.
A similar approach governs High-Speed Diesel pricing. Actual costs from PSO-imported cargoes will apply where imports have taken place, while the KPC term-contract premium will be used in periods without imports, with incidentals and customs duty based on the calendar year-to-date average.
The petroleum levy will continue to be capped by the ceiling approved by the Cabinet, with applicable rates conveyed annually by the Finance Division to the Petroleum Division for notification. Any in-year revision to the levy will require consultation with and approval from the Finance Division.
The most consequential compliance measure links future import allocations to OMC performance. HSD imports for FY2027 will remain restricted to PSO alone, while MS imports by other OMCs will be allocated according to market share, subject to a minimum parcel size of 10,000 metric tonnes.
Companies that default on import commitments, delay deliveries beyond the agreed month, or fail to meet refinery uplift obligations will be barred from receiving further import allocations for nine months.
Existing treatment of exchange rate adjustments, Refinery Regulatory Duty, Research Octane Number pricing, HSD sulphur penalties and IFEM settlement remains unchanged.
The daily pricing methodology has also been extended to Superior Kerosene Oil and Light Diesel Oil, both of which will now follow the same seven-day rolling average formula. OGRA has been directed to draft detailed operating procedures to implement the revised framework.
