Pakistan’s oil refining sector, which had earlier agreed to a government-backed pricing formula linking diesel prices to imported crude benchmarks, is now facing mounting financial pressure
The industry players allege that authorities have imposed a cap on margins that is “artificial and misleading,” exacerbating the strain on the sector. At the centre of the dispute is the government’s decision to lock the diesel “crack spread” at $41.5 per barrel, a figure industry representatives say is being used as a headline number divorced from ground realities. They argue that the actual economics of refining are being systematically understated.
According to refinery officials, the government’s calculation ignores the true delivered cost of crude oil, including freight, premiums, and increasingly significant war risk insurance costs tied to regional geopolitical tensions.
