Petrol Price in Pakistan Held Rs15 Lower as Refineries Absorb Hike

Photo: file

Petrol in Pakistan is staying Rs15 per litre cheaper than it would have been, because local oil refineries have agreed to carry the extra cost instead of passing it to drivers. The government says the refineries will bear a burden of about Rs15 billion every month, and petrol was due to go up by Rs15 a litre on Friday before the deal held the price.

Petroleum Minister Ali Pervaiz Malik and Information Minister Attaullah Tarar announced the move at a joint press conference in Islamabad on Monday. Dawn reported that Malik thanked the refineries for stepping in at a time when people are already feeling the pressure of rising prices.

He said the prime minister had met the refineries and asked them to help keep petrol as cheap as possible. The refineries, he said, had listened, and they had also raised their output in recent months. That extra output had brought them good profits in the last three months, which made the request easier to accept.

For a driver, the maths is simple. Without this step, a litre of petrol would have cost Rs15 more from Friday. With it, the price stays where it is, at Rs377.91 a litre, even though the cost of bringing fuel into the country has climbed sharply.

The reason for that climb is the war involving the United States and Iran, and the wider tension in the region. Before the crisis, the premium on petrol stood at about $5 a barrel. Malik said it has since risen to $20 a barrel, and later tenders from Pakistan State Oil showed premiums of $25 to $30 a barrel. Freight, insurance and transport costs have all gone up with it.

Pakistan makes only about 30 percent of the petrol it uses. The other 70 percent is imported, so world prices hit the pump fast. The government changed the pricing formula on 30 October, with cabinet approval, to deal with that. Under the new formula, imported petrol is priced on the actual cost of the relevant Pakistan State Oil cargo, while local refineries have their premium, incidental costs and customs duty fixed at their 7 March 2026 levels for 30 days. The gap between the two is adjusted through the petroleum levy, so the benefit reaches the consumer.

24 News reported that Malik will meet the refineries again on Tuesday to talk about the issues still open, and to look for more ways to protect consumers.

Tarar said the prime minister had ordered from the start that as little burden as possible should fall on the public. He said the fuel subsidy scheme, started on 13 September, has now signed up more than 15 million people, with about Rs27 billion in relief given so far. Under that scheme, motorcycle users get Rs500 off petrol each week on registration by SMS, and owners of cars up to 800cc get 10 litres at Rs100 less per litre every 10 days.

Both ministers stressed there is no fuel shortage. Malik said November supplies are fully covered, and the prime minister has told officials to make sure December and January are covered too. He also said the government will act against LPG being sold at unjustified prices, after reports of Rs600 per kilogram.

The relief sits against a harsh price history this year. Petrol had climbed from Rs266 a litre in the first week of March to a peak of Rs458.41 on 3 April, before coming back to Rs377.91. The government still levies Rs114 a litre in taxes and duties on petrol, and Rs100 a litre on diesel, so the pump price remains high even with this step. And the ministers were clear that the deregulation plan they favour is on hold while the crisis lasts. Once it ends, Malik said, the government will move back towards competition and refinery upgrades.

This is the same regional pressure this blog has followed in the Iran team leaving Doha as a draft US deal circulates, and in Pakistan taking over the G-24 chairmanship with a plan for fairer global finance. Fuel is where ordinary Pakistanis feel those big stories first, at the pump, in bus fares and in the price of goods carried by road.

The key figures:

• Rs15 per litre cheaper than the international market rate, ministers say
• About Rs15 billion a month borne by local refineries
• Rs377.91 a litre, the current petrol price, held instead of rising on Friday
• 30 percent of petrol made at home, 70 percent imported
• Premium up from $5 a barrel before the crisis to $20, and $25 to $30 in later tenders
• More than 15 million people registered for the fuel subsidy scheme, about Rs27 billion in relief so far

Sources

• Dawn, Govt enlists oil refineries to shield citizens from global price hikes
• 24 News, Govt says refinery deal prevented Rs15 per litre petrol hike
• Geo News, New mechanism allowed govt to keep petrol price Rs15 cheaper: minister

What happens next is the meeting with refineries on Tuesday, where the government will push for more relief and settle the issues still open.

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