Pakistan has introduced a revised petrol pricing formula effective 2 November 2026, changing how imported and locally refined petrol prices are determined amid volatility triggered by the Iran-US war.
The Federal Cabinet approved the new mechanism on 30 October 2026, according to Petroleum Division documents cited by Geo News via PKRevenue. Under the revised formula, imported petrol prices will be calculated using the actual import cost of the relevant Pakistan State Oil (PSO) cargo. If the actual cost is unavailable for daily pricing, the premium, incidental expenses and customs duty of the last available cargo will be used.
For local refineries, a temporary 30-day mechanism fixes the premium, incidentals and customs duty used to calculate petrol’s ex-refinery price at their 7 March 2026 levels, before the Iran-US war. The ex-refinery price is therefore expected to remain below the import price, and refineries must deposit the difference under the petroleum levy account.
The Nation reports that consumers have started receiving relief of Rs14.71 per litre, after the government directed refineries to surrender the extra war-time premium that was being charged on imported petrol but was also applied to locally produced fuel. OGRA’s letter to the Petroleum Division puts the surrender at Rs49.02 per litre in the petroleum levy account, translating into Rs14.71 per litre towards the overall petroleum levy of Rs80 per litre. The new mechanism will remain in place for the next 30 days.
The government has stated that the resulting benefit will be passed on to consumers through a corresponding reduction in petrol prices. The existing petroleum levy of Rs80 per litre remains unchanged and is separate from the new pricing adjustment.
Sources: The Nation (2 Nov 2026), PKRevenue (new petrol pricing formula, effective 2 Nov 2026).
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