What is the formula behind Pakistan's daily fuel prices?

July 23, 2026 (MLN): Petrol and diesel prices are now moving every single day. Motor Spirit (MS) and High Speed Diesel (HSD) rates changed on three straight days this week from Rs315.80 and Rs360.06 per litre on July 21, to Rs320.73 and Rs367.21 on July 22, to Rs327.12 and Rs375.04 on July 23.

The changes came as the Oil and Gas Regulatory Authority (OGRA) shifted to a daily notification schedule, replacing the fortnightly cycle that was in place until recently.

Fuel prices were reviewed fortnightly before the US-Iran war. During the conflict, the government shortened this to weekly reviews. The latest change moves the cycle to daily, with OGRA computing and publishing ex-depot prices every day except Saturdays and Sundays, with the DG Oil office kept informed of every publication.

How the ex-depot price is built up

The price of both fuels is assembled from a fixed set of components published by OGRA. The starting point is the Platts Arab Gulf Mean Average, a seven-working-day rolling average of the Platts assessment Gasoline 92 RON for MS, Gas Oil for HSD. For July 23, this stood at $104.48/bbl for petrol and $144.90/bbl for diesel.

To this is added a premium covering freight. For MS, it is the weighted average of freight and margin on PSO cargoes imported in the last seven working days, or the year-to-date average since January if there were no imports.

For HSD, the premium is fixed under the government-to-government supply arrangement with Kuwait Petroleum Corporation.

Together these give the Cost & Freight figure, which is converted from dollars to rupees using a seven-day rolling average of the SBP exchange rate and a conversion factor of 158.98 litres per barrel.

From here, a set of smaller adjustments is layered in, including incidentals such as bank charges, insurance, HDIP and port charges on PSO cargoes.

It also includes ocean loss or gain to account for quantity change in transit, an exchange rate adjustment showing the variance between the dollar-rupee rate on the day PSO discharges its LC and the SBP rate used for that pricing period.

Customs duty, charged on the applicable cargo-based average, is also factored in.

The sum of all of this gives the Ex-Refinery/Import Price, which worked out to Rs218.66/litre for petrol and Rs278.28/litre for diesel on July 23.

On top of the ex-refinery price, the Inland Freight Equalization Margin (IFEM) is added to cover the weighted average cost of transporting the product across the country, along with the OMC's Margin and Dealer's Margin, both fixed by the government for oil marketing companies and pump dealers respectively.

Finally, the Petroleum Levy (PL) and Climate Support Levy (CSL), notified separately by the federal government, along with Sales Tax (ST, currently zero on both MS and HSD), are applied to arrive at the final ex-depot price Rs327.12/litre for petrol and Rs375.04/litre for diesel as of July 23, excluding secondary freight from OMC depots to individual pumps.

Import allocation

Under the revised mechanism, HSD imports for FY2027 will be routed exclusively through PSO.

MS imports will be allocated among oil marketing companies by OGRA through the Product Requirement Mechanism, based on each company's prior market share, with a minimum parcel size of 10,000 metric tonnes.

Companies that default on import commitments, delay uplift, or fail to meet refinery commitments face a nine-month disqualification from further import allocation. Platts benchmark data for both fuels has been published on OGRA's website since July 1.

The same daily rolling-average mechanism now applies to Superior Kerosene Oil (SKO) and Light Diesel Oil (LDO) as well.

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