Govt caps HSD crack at $41.89, crings back crude-based pricing

Mettis Global reported that cabinet members signed off on a reworked crude-linked formula for high-speed diesel on August 19, 2026. Under the new setup, the HSD crack is capped at $41.89 per barrel and cannot fall below $11.33 per barrel. The steps are aimed at cushioning higher crude, freight and insurance costs tied to the Iran-US war. The arrangement will run for two months, though the government can review it earlier if geopolitical conditions improve and oil prices fall quickly.

Diesel prices will be built from Dubai Crude quotations published by Platts, averaged over seven working days, plus the monthly Aramco premium or discount. Crude sourced from outside the Gulf will attract an extra premium of up to $10 per barrel over the Gulf benchmark, reimbursed through the Inland Freight Equalization Margin (IFEM). Only Pakistan State Oil (PSO) will be permitted to import HSD, and the government will reimburse PSO through IFEM for any differential the change creates, based on anticipated use of up to 5,000 tonnes a day.

A major change is that OGRA will post daily maximum ex-depot prices for motor spirit and HSD on its website, with no clearance needed from the federal government or the prime minister. The petroleum levy on both products stays under an existing Rs80 per litre ceiling, and any rate change needs Finance Division consent.