How petrol price is determined in Pakistan after 15 days?

KARACHI: Bol News has obtained documents which show how petrol price is determined after every 15 days in Pakistan, Bol News reported.

The documents show that people have to bear burden of the international market and exchange rate fluctuation as well as benefit of locally produced petroleum products was also not delivered to the people.

Oil marketing companies and refineries will provide high-speed diesel and petrol ex-refinery rates, the document said.

As per the documents, pricing is determined at Gulf Markets rates. Rent and other charges shall be equivalent to the charges of Pakistan State Oil and the exchange rate will also be as per the PSO for pricing of petrol.

The exchange rate will be determined as per the last LC opening rate of the PSO. Customs duty, incidental charges will also be levied under the formula, the documents mentioned.

Apart from ex-refinery price, IFEM charges and distribution dealer margin will also be levied, said the documents. Petroleum levy and sales tax are also included in the pricing formula, they added.

The prices of petroleum products are fixed on the basis of pricing parameters approved by the ECC/ Cabinet, officials of the Petroleum Division said.

Ex-refinery/import prices of petrol and diesel are fixed on the basis of 15-day average FOB prices of the Arabian Gulf market.

Import charges/marketing charges and government taxes are also added to the above base price to finalize prices for local consumers, said the officials of Petroleum Division.

“We have to import about 75% of our crude oil, 70% of petrol and 38% of diesel. The prices of petroleum products produced by local refineries are also based on the prices of imported petroleum products (import parity price), they said.

Petroleum Division said any increase in international oil prices directly affected the cost of import of crude oil/petroleum products as well as prices of locally produced products.