KARACHI: In a bid to cushion consumers from a sharp rise in global oil prices, the government has approved a one-week emergency pricing mechanism for petroleum products after local refineries agreed to offer voluntary discounts.
The decision followed a high-level meeting chaired by the minister for petroleum a few days ago, attended by senior officials of the Petroleum Division and chief executives of major refineries.
According to an official communication issued by the Directorate General (Oil), refineries agreed to provide a discount of $70 per barrel on high-speed diesel (HSD) and $15 per barrel on motor spirit (petrol) for sales made during the previous week. Based on this concession, the federal cabinet approved a temporary pricing formula for the week ending April 11, 2026.
Under the arrangement, the lowest Platts value of HSD recorded between April 6 and April 10 will be used to determine domestic prices. In addition, instead of applying the previously used premium of $56 per barrel for Pakistan State Oil (PSO) cargoes, a reduced premium of $5.1 per barrel, aligned with Kuwait Petroleum Corporation benchmarks and inclusive of import-related costs, will be applied.
Officials said the differential premium and associated costs borne by PSO would be adjusted through a settlement mechanism with refineries under the Inland Freight Equalisation Margin (IFEM), overseen by the Oil and Gas Regulatory Authority (Ogra).
The Petroleum Division has directed refineries to coordinate with Ogra and PSO to ensure the timely settlement of differential amounts under the IFEM mechanism.
