New pricing system may halt petrol import

It highlighted a specific issue in the mechanism for MS import pricing, which could result in importing OMCs being unable to recover their actual procurement costs.Under the approved mechanism, where PSO has no MS import during the preceding rolling seven working days, the CYTD average of premium, incidentals and customs duty is applied.OCAC said it believed that the CYTD average was not an appropriate proxy for the prevailing import cost.

In the absence of a PSO cargo within the seven-working-day window, the pricing should instead be based on the actual premium, incidentals, customs duty and applicable exchange rate for PSO's most recent MS import cargo."This would ensure that the administered price reflects the latest actual procurement cost, rather than a historical average which may be materially different from the replacement cost faced by importing OMCs," it said.

"The issue is particularly relevant in the current market, where MS import premiums have increased significantly."In October 2026, PSO has an approximately 10-day gap between its cargoes scheduled for October 13-15 and October 26-28.

During this period, the current mechanism could revert to the CYTD average premium of approximately $13/barrel.However, PSO's own subsequent cargoes are being procured at premiums of $28.47/barrel for late October and $28.76/barrel for early November.

Industry cargoes are similarly being procured at premiums substantially above the CYTD average.

Consequently, applying the CYTD average during the intervening period could result in an estimated under-recovery of approximately Rs16-17/litre for the importing OMCs.OCAC, therefore, proposed that the relevant provision be amended to provide that where PSO had no MS import cargo during the preceding rolling seven working days, the premium, incidentals, customs duty and applicable exchange rate adjustment for PSO's most recent MS import cargo shall be applied instead of the….

"Ensuring that the pricing mechanism adequately reflects actual import costs is, therefore, important not only for the financial sustainability of importing OMCs but also for maintaining uninterrupted petroleum supplies," the council said.The matter was discussed with the Ministry of Energy (Petroleum Division) and Ogra on October 6, where the OCAC was advised to submit its recommendation to the relevant forum for consideration.The issue, it said, also needed to be viewed….

OCAC requested for a meeting and the secretary's intervention to consider the proposed amendment on an urgent basis.

New pricing system may halt petrol import ZAFAR BHUTTA | Updated 10 minutes ago | In letter to secretary, industry says importing OMCs may not be able to recover actual costs.