The federal government has revised the petrol pricing mechanism, directing refineries to surrender the difference between import and ex-refinery prices as petroleum levy, with the resulting benefit to be passed on to consumers through a corresponding reduction in petrol prices. The Petroleum Division issued separate notifications to the Oil and Gas Regulatory Authority (OGRA) and oil refineries after the federal cabinet approved changes to the motor spirit (MS) pricing mechanism on October 30 to address price movements amid the continued Iran-US war. Under the revised arrangement, petrol's import price will be determined on the basis of the actual import cost of the relevant Pakistan State Oil (PSO) cargo. If the actual import cost is unavailable for a particular day's pricing, the premium, incidentals and customs duty of the last available cargo may be used. For the next 30 days, refineries will be entitled to an ex-refinery price calculated by fixing the premium, incidentals and customs duty at the levels applicable on March 7, 2026, before the war. Ex-refinery price is the rate at which an oil refinery sells petroleum products to oil marketing companies before the addition of government taxes, duties, dealer commissions and other distribution costs. Under the arrangement, the difference between the import price and the ex-refinery price will have to be surrendered by refineries under the petroleum levy head of account C03901. The resulting benefit will be passed on to petrol consumers exclusively through a corresponding reduction in the retail price. The Petroleum Division has directed all oil refineries to deposit the differential amounts in accordance with the OGRA price and petroleum levy notifications issued from time to time. Refineries will also be required to submit daily reports of domestic petrol sales, along with computerised payment receipts and challans, to the Petroleum Division and OGRA for verification and reconciliation. Sources said the revised formula was intended to prevent consumers from bearing the full impact of higher premiums and freight charges claimed by refineries. Passing these additional costs directly on to consumers could have resulted in a substantial increase in petrol prices. OGRA has also directed refineries to deposit adjustments exceeding Rs49 under the revised mechanism. The prices announced on October 30 were determined under the new formula, which officials said had helped avert a major increase. Meanwhile, speaking at a convocation on Sunday, Petroleum Minister Ali Pervaiz Malik said more than 12 to 13 million deserving people were being provided subsidised petrol at pre-war prices. He said disruption around the Strait of Hormuz had affected countries worldwide, forcing families to make difficult choices as governments struggled to arrange foreign exchange to purchase increasingly expensive oil, gas, liquefied petroleum gas and other fuels. Describing the crisis as unprecedented in its scale and duration, the minister said Pakistan was among the few countries to have shifted from blanket subsidies to targeted assistance supported by technology. He said the government had avoided spending public resources on subsidising fuel for those who could afford it, including families owning expensive vehicles such as Land Cruisers, and had instead directed assistance towards people who needed it most. The minister said the government had also ensured transparency in the fuel pricing process by making relevant information available to the public. Consumers, he added, would not need to approach him or the prime minister for relief when international oil prices declined, as the benefits of lower prices should be passed on to households.