Pakistan’s petroleum sector has reported a loss of Rs3 per litre on the import of crude oil and finished products for the period between July and September 2025. The loss is attributed to a discrepancy in the exchange rates used for pricing petroleum products and the actual rates applied during settlement for imports, BR reported, citing a report by Cnergyico Pk.
The report highlighted that the exchange rate used in the product pricing formula was considerably different from the rate applied during payment settlements for imported oil, leading to substantial unrecovered exchange losses. The discrepancy resulted in an average loss of Rs3 per litre during the quarter, translating into considerable financial strain for oil importers.
The petroleum industry has raised concerns with the government, urging authorities to amend the product pricing formula to prevent further losses.
In addition to the exchange rate issue, the report also noted that the petroleum sector has faced increased production costs due to changes in tax policy.
The government reclassified petroleum products from taxable supplies to exempt supplies for the purpose of sales tax, disallowing input tax adjustments on crude oil purchases from July 2024. To address this, the Economic Coordination Committee (ECC) of the Cabinet approved the recovery of unadjusted sales tax for 2025 through the Inland Freight Equalization Margin (IFEM).
Cnergyico Pk emphasised the need for swift and decisive government action to resolve these issues, which it believes are critical to the sustainability of the petroleum industry in Pakistan.
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