KARACHI: Pakistan’s petroleum industry booked a loss of Rs3/litre on import of crude oil and finished products in three months (July-September 2025) on “a significant difference” in rupee-dollar exchange rate between the one used in product pricing and the one applied at the time of settlement of import payment, according to a recent Cnergyico Pk report.
The company said the petroleum industry had raised the issue before the government, urging the relevant authorities to make necessary changes in the product pricing formulate to stop bearing the unnecessary losses translating into heavy amount.
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The oil sector is facing a challenge of “the significant difference between the exchange rates used in the product pricing formula and the actual settlement rates applied at the time of payment for imported crude oil and products,” Cnergyico Pk reported in its detailed financial report for the quarter ended on September 30, 2025 sent to the Pakistan Stock Exchange (PSX) on Thursday.
“During the current quarter, this difference has averaged approximately Rs3(per litre), resulting in substantial unrecovered exchange losses for every importer of crude oil or petroleum product.”
“The oil industry has raised this issue with the request to bring necessary changes in the product pricing formula so that businesses do not incur huge losses on this anomaly,” the company’s CEO said in the report.
The report highlighted that the industry had been recording additional cost to produce refined petroleum products from crude oil since the government denied the industry adjusting input tax paid on the purchase of crude oil to the sales tax on refined products including petrol, high-speed diesel, light diesel oil, and kerosene.
“The government reclassified petroleum products from taxable supplies to exempt supplies for the purpose of sales tax, resulting in the disallowance of input tax effective July 2024. In response, the Economic Coordination Committee (ECC) of the Cabinet approved the recovery of unadjusted sales tax for the financial year 2025 through the Inland Freight Equalization Margin (IFEM),” the report read.
“We hope that the government will take timely and decisive action to resolve this major issue immediately,” the company said.
Over the past few years, Cnergyico Pk further said, the demand of furnace oil (FO) had already declined significantly due to shift towards alternate energy sources.
“Compounding this, the government imposed a Petroleum Levy (PL) and Carbon Support Levy (CSL) on the local sales of FO.
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“These levies substantially increased the costs for consumers, resulting in almost negligible local demand and compelling refineries to export FO at a greater loss. Consequently, over 80% of FO production is now being exported, compared to zero exports up to the financial year 2022.
“We hope that the government will consider the adverse effect of above levies and will address this issue immediately,” the company maintained in the report.
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