The federal government has reportedly introduced a new petrol pricing formula aimed at reducing the financial burden of the Petroleum Development Levy (PDL) on consumers, with potential savings of Rs10 to Rs15 per litre, according to sources familiar with the decision.
Under the revised arrangement, incidental charges on imported petrol shipments will be reduced to levels prevailing before March 2026, while oil refineries will be required to contribute part of the difference between import and refinery prices towards the petroleum levy.
The new mechanism will calculate petrol import prices using the actual cost of cargoes imported by Pakistan State Oil (PSO). Where the actual cost is unavailable, the premium and incidental charges from the most recent imported shipment may be used.
For the next 30 days, refineries will be permitted to calculate their ex-refinery petrol prices using the rates applicable on March 7, 2026. Premiums, incidental charges and customs duties will also be maintained at their March 7 levels during this period.
According to sources, the difference between the calculated import price and the ex-refinery price will be deposited by refineries under the petroleum levy account.
However, refinery representatives have raised serious concerns about the financial consequences of the revised formula.
Industry sources warned that the arrangement could result in losses exceeding Rs30 per litre for refineries, potentially placing significant pressure on their operations.
Some refinery representatives have described the decision as politically motivated and indicated that they intend to formally approach the government to request a review.
While the proposed mechanism could provide relief to motorists, the actual reduction in retail petrol prices and its impact on the refining industry remain uncertain.