Refinery margins slashed further

The Express Tribune reported on October 21 that refineries accepted a further $3.9-per-barrel reduction in their HSD margins after a government request. The concession contributed to a Rs7.69-per-litre diesel price cut on October 19, as the federal cabinet endorsed an updated pricing framework.

Under the revised formula, the refinery crack allowed for diesel cannot exceed $38 per barrel, while the $11.33 floor remains in place. The cabinet also extended the crude-based pricing arrangement for three months, with a possible earlier review if global conditions improve and oil prices fall sharply. Attock Refinery, National Refinery, Cnergyico PK and Pakistan Refinery joined the consultations; Cnergyico’s vice chairman said refiners were under financial strain because the mechanism did not fully reflect crude procurement costs.