- Petrol premium surged from $5 to $20.
- Refineries helped absorb Rs15 per litre increase.
- Minister says Nov gas arrangements already secured.
ISLAMABAD: Petroleum Minister Ali Pervaiz Malik said on Monday that the government’s revised pricing mechanism and cooperation from local refineries enabled it to keep petrol around Rs15 per litre cheaper than international market rates amid the US-Iran war.
Speaking about the recent changes to the petrol pricing mechanism, Malik said the regional conflict had sharply increased costs associated with fuel imports, including freight, insurance and other logistics expenses.
He said the premium on petrol stood at around $5 per barrel before the war but subsequently surged to $20 per barrel.
The minister said subsequent PSO tenders showed premiums climbing further to around $25-$30 per barrel and even higher as regional conditions deteriorated.
Malik said the government worked with local refineries to deal with the situation and contain the impact on consumers without disrupting the availability of imported petrol.
Around 70% of the country’s petrol requirement comes from the international market while locally produced petrol accounts for about 30%, according to the minister.
He said the government had to ensure that any intervention did not make imported petrol commercially unviable and consequently lead to supply shortages.
“I am grateful that they listened to our appeal and absorbed roughly a Rs15 increase that was coming due for petrol on Friday, helping the government maintain prices,” Malik said, referring to local refineries.
He said the arrangement had allowed petrol to be kept around Rs15 per litre cheaper than international market rates, adding that refineries were absorbing a burden of roughly Rs15 billion per month.
Malik said international market prices were now declining, expressing hope that the trend would lead to further improvement for consumers.
How revised petrol pricing works
The federal cabinet approved changes to the petrol pricing mechanism on October 30 amid volatility caused by the US-Iran war.
Under the revised formula, the import price of petrol is determined on the basis of the actual import cost of the relevant PSO cargo. If that cost is unavailable for daily pricing, the premium, incidentals and customs duty of the last available cargo are used instead.
For local refineries, the government has temporarily fixed the premium, incidentals and customs duty used in calculating the ex-refinery petrol price at their March 7, 2026 — pre-war — levels for 30 days.
The difference between the import price and the resulting ex-refinery price is to be surrendered by refineries under the petroleum levy account, with the resulting benefit passed on through a corresponding reduction in the petrol price.
The government has also introduced a short-term adjustment to smooth petrol price movements, incorporating the benefit arising from a premium differential into petrol prices at a rate of $2.950 per barrel per day.
Govt says no fuel shortage
Meanwhile, Information Minister Attaullah Tarar said there was no fuel shortage in Pakistan and the country’s requirements were being met.
Malik also rejected reports that LPG prices had climbed as high as Rs700 per kilogramme.
On gas supplies, the petroleum minister said arrangements for November were already in place, while the government was making arrangements to meet requirements for December and January.
