The federal government has approved a revised pricing mechanism for Motor Spirit (MS) petrol amid the Iran-US war, directing oil refineries to pass on the financial benefit of the new arrangement to consumers through corresponding reductions in petrol prices.
According to a notification issued by the Ministry of Energy (Petroleum Division) on October 30, 2026, the Federal Cabinet approved the revised mechanism following a summary submitted by the Petroleum Division. Under the decision, petrol import prices will be determined using the actual import cost of the relevant Pakistan State Oil (PSO) cargo.
If the actual import cost of a cargo is unavailable for daily price calculations, authorities will use the premiums, incidentals, and customs duty of the last available cargo to determine the import price.
The government has also allowed refineries to calculate their ex-refinery petrol prices using premiums, incidentals, and customs duty at the levels applicable on March 7, 2026, before the war, for the next 30 days.
Under the revised arrangement, the difference between the determined import price and the ex-refinery price will be surrendered by refineries under the Petroleum Levy account. The resulting financial benefit must be passed on to petrol consumers through an equivalent reduction in retail petrol prices.
The notification further directs refineries to deposit the differential petroleum levy according to OGRA’s price notifications and submit daily reports of domestic petrol sales, along with CPPA calculations, to the Petroleum Division and OGRA for verification and reconciliation.
The revised mechanism applies to major refineries, including Pak-Arab Refinery, Pakistan Refinery, Attock Refinery, National Refinery, Cnergyico Refinery, and ENAR Petroleum Refining Facility.
