Every driver in Pakistan has watched fuel prices jump on the 1st or 16th of the month and wondered who decides these numbers. The short answer is OGRA plus the Finance Division. The longer answer is a fixed pricing formula that anyone can follow if they know the seven building blocks.
1. Who actually sets the price
OGRA (Oil & Gas Regulatory Authority) calculates the ex-refinery cost and forwards the summary to the Finance Division, which issues the final notification. Prices are reviewed every 15 days based on international benchmarks and the USD-PKR rate over the preceding two weeks.
The Petroleum Division and Ministry of Finance can adjust tax rates and levies inside the formula, but they cannot ignore the underlying import cost. That is why prices move even when the Petroleum Development Levy stays flat.
2. The seven building blocks of one litre
A litre of petrol or diesel is built from: (1) PSO ex-refinery price based on Arab Gulf Platts, (2) Inland Freight Equalization Margin (IFEM), (3) Petroleum Development Levy (PDL), (4) Customs duty, (5) GST at 0% or 17% depending on the current notification, (6) OMC margin (the Oil Marketing Company's fee) and (7) Dealer's commission.
The single biggest lever the government controls is PDL. In 2026 PDL on petrol is around PKR 60 per litre, meaning almost a quarter of what you pay at the pump is a tax rather than the fuel itself.
3. Why the price changes on the 1st and 16th
OGRA uses the fortnightly average of Platts Arab Gulf quotations and the SBP interbank USD-PKR rate. If either rises, ex-refinery cost rises. If the rupee gains against the dollar, prices sometimes fall even when Platts is up.
This is also why sudden currency shocks are felt at the pump within two weeks — you cannot escape a weaker rupee for long if you drive on imported fuel.
4. How to read the OGRA summary yourself
OGRA publishes a one-page summary every 15 days that lists ex-refinery price, PDL, GST, IFEM, OMC margin, dealer commission and the final maximum ex-depot sale price. If your local pump charges more than the ex-depot sale price plus the dealer's commission, you are being over-charged.
Bookmark the OGRA and PSO pages below and compare them with the sticker at your pump — this is your best defence against unfair pricing.
Frequently Asked Questions
Can OGRA freeze fuel prices?
Yes, the government can freeze prices for a fortnight, but the difference is either absorbed by cutting PDL/GST or added to the next revision.
Why is diesel usually more expensive than petrol now?
Diesel demand from transport, industry and agriculture is higher, so international HSD benchmarks trade above petrol most of the year.