Karachi: In a strategic move to shield consumers from rising petrol prices, the Pakistani government has decided to absorb the increased import costs by reducing the Petroleum Levy (PL) on petrol, effectively transferring the cost burden to refineries. Diesel pricing remains unchanged. According to OGRA's latest pricing sheet, this adjustment will see the PL on petrol drop from Rs80 per litre to Rs65.29 per litre, leading to a refined petrol PL burden of Rs49.02 per litre.

The measure comes as a response to a jump in the import premium, which has risen from US$19.88 per barrel to US$25.52 per barrel, prompting a potential increase of Rs14.71 per litre in petrol prices. To maintain stability, the government has fixed the import premium, incidentals, and customs duty at pre-war levels from March 2026 for the next 30 days.

Under this arrangement, refineries will deposit the difference between the import price based on PSO's actual cargo import costs and the ex-refinery price into the government's Petroleum Levy account. This marks the second petroleum pricing adjustment this quarter, following a revision to the HSD crack benchmark on October 20, 2026.

According to JS Global, this development could negatively impact the short-term profitability of refineries such as PRL, ATRL, and NRL, with potential earnings declines of 16-18%. While the current policy might raise concerns about the investment climate in the refinery sector, the long-term outlook remains dependent on refinery upgrade projects, with financial closure being a critical factor.