Petrol Levy Reduction Shifts Rs15 Billion Monthly Burden to Refineries

Pakistan reduced the direct petrol levy to shield consumers from higher import costs, pushing an estimated monthly burden of up to Rs15 billion onto domestic refineries.

NationPulse Desk

Oct 31, 2026 · 4:00 PM 2 min read

Key takeaways

Pakistan cut the direct petroleum levy from Rs80 to Rs65.29 per litre effective October 31, 2026.

The petrol import premium including freight increased from $19.88 to $25.52 a barrel.

Topline Research estimates the monthly cost for local refineries will reach Rs10 billion to Rs15 billion.

Refineries produce about 30% of Pakistan's petrol and must surrender Rs49.02 for every litre they sell.

Authorities in Pakistan reduced the petroleum levy collected on petrol to stop rising import expenses from hitting buyers, transferring the financial impact onto domestic refineries instead. Based on data from Topline Research and the petroleum price notification issued on October 31, 2026, this policy might cost refineries between Rs10 billion and Rs15 billion every month.

Higher Import Costs, Lower Direct Levy

The import premium for petrol, which includes freight charges, rose from $19.88 to $25.52 per barrel. This shift added about Rs14.71 to every litre.

Instead of passing that increase to the public, the administration reduced the direct petroleum levy by an identical amount, dropping it from Rs80 to Rs65.29 per litre. The official notification sets the resulting petrol price at Rs377.91 per litre, leaving out secondary freight costs.

What the Notified Price Includes

The notification separates the official petroleum levy from the amount charged directly to oil marketing companies following the refinery adjustment. The price breakdown consists of:

Rs307.62 per litre before the petroleum levy, climate support levy and sales tax.
A notified petroleum levy of Rs80 per litre, offset by a Rs14.71-per-litre adjustment through refineries.
A direct petroleum levy of Rs65.29 per litre after that adjustment.
A climate support levy of Rs5 per litre, with petrol remaining exempt from sales tax.

Why Refineries Face Rs49.02 Per Litre

The Rs14.71 adjustment is determined using estimated national petrol volumes. Per the notification, refineries must surrender the matching amount at a rate of Rs49.02 for each litre they provide to oil marketing companies.

This higher per-litre deduction stems from the market share of local refineries, which supply about 30% of the petrol in Pakistan. Consequently, the cost computed across the entire country is recovered from a limited group of refinery sales instead of being distributed across all sold petrol.

Monthly Impact Remains a Preliminary Estimate

Topline Research calculates the potential monthly cost for refineries between Rs10 billion and Rs15 billion, relying on a yearly petrol output of 2.6 million tonnes. The brokerage noted that its figure is only a preliminary estimate.

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