Refineries seek withdrawal of new petrol pricing mechanism

ISLAMABAD: Pakistan’s refineries have opposed the new petroleum pricing mechanism, warning that the revised formula could cause losses of up to Rs49 per litre and affect investment in the local refining sector, ARY News reported.

In a joint letter to the petroleum minister, four refineries, including Attock Refinery, National Refinery and Pakistan Refinery, expressed reservations over the revised pricing mechanism for motor spirit (petrol).

The refineries demanded the immediate withdrawal of the revised pricing mechanism and restoration of the pricing formula that was in place before October 31, 2026. They also urged the government to restore the pricing formula introduced on March 7, 2026.

According to the joint letter, the government implemented the new pricing mechanism without consulting the refineries. The companies said the revised system could increase their financial difficulties and adversely affect investment in the refining sector.

The refineries warned that the new formula could also affect refinery upgradation projects, delay their completion and disrupt local petrol production.

They said the revised pricing mechanism was contrary to existing agreements and government policy. The refineries also raised concerns that the premium on local petroleum prices had been frozen despite an increase in costs in the international market.

The joint letter further stated that petroleum levy was now being collected directly from refineries.

The refineries called for an immediate meeting with the Petroleum Division to discuss the matter and requested the government to direct OGRA to take corrective measures in the pricing mechanism.