Pakistan State Oil to be sole diesel importer in FY27

Pakistan has moved to place high-speed diesel imports entirely under the state-owned Pakistan State Oil, barring private oil marketing companies from bringing in the fuel in the current fiscal year, according to a monitored public feed based on Dawn Business.

The decision was taken by the federal cabinet on the Petroleum Division’s request, which cited “prevailing market conditions” and the need to reduce the impact of rising petroleum prices on consumers. Under the new policy guidelines, private oil marketing companies will no longer be allowed to import high-speed diesel. The guidelines state that HSD imports will be permitted only through PSO for FY27.

The cabinet also approved changes for petrol imports. Private oil marketing companies will still be able to import petrol, but only with approval from the Oil and Gas Regulatory Authority and in line with market share determined through the monthly product review mechanism. The minimum import parcel has been set at 10,000 tonnes. Companies that fail to meet a committed import obligation, delay delivery beyond the agreed month, or do not lift committed volumes from refineries could be barred from new import allocations for the next nine months.

The policy framework also sets out how petroleum pricing will be calculated. For petrol and diesel, the import price on a free-on-board basis will be based on a seven-working-day rolling average of Platts Arab Gulf assessments for the relevant product. Ogra will announce prices daily, except on Saturdays and Sundays, under the revised mechanism.

For import premium, incidentals and customs duty, the benchmark will remain Pakistan State Oil. The weighted average of PSO’s actual import-related costs will be used for the rolling seven-day calculation. If PSO does not import petrol during that period, the calendar year-to-date average will apply. The same approach will also be used if a long-term supply agreement is signed, such as the one under discussion with OQ Trading of Oman.

The move toward long-term supply contracts appears aimed at securing fuel supplies amid concerns linked to the closure of the Strait of Hormuz. The guidelines say PSO will enter a long-term petrol supply contract with OQ Trading, reflecting a push to strengthen supply security.

A similar arrangement is already used for diesel, with PSO’s long-term contract with Kuwait Petroleum Company serving as a reference for pricing when no HSD cargoes are imported over the previous seven working days. In that case, the KPC term-contract premium is used, while incidentals and customs duty are based on the year-to-date average.

The instructions also say the petroleum levy will remain within the upper limit approved by the cabinet, with the Finance Division to advise the applicable rate for notification. Ogra has been instructed to compute and publish ex-depot prices on its website without needing separate approval from the federal government or the prime minister.

This report is based on a monitored public feed and attributed to Dawn Business. Source: Dawn Business - https://www.dawn.com/news/2017158/pakistan-state-oil-to-be-sole-diesel-importer-in-fy27