The price formula for Pakistan’s domestic oil products is formulated by OGRA (Oil & Gas Regulatory Authority), established in 2002, to effectively supervise the midstream and downstream of the oil and gas industry in a bid to safeguard the public interest. The pricing mechanism of major domestic oil and gas products is as follows:
The price of domestic crude oil is correlated to the FOB price of a package of international crude oil, namely Oman mix crude oil and Dubai crude oil.
The price of domestic condensate oil is in relation to the price of similar condensate oil in international market.
Pricing of imported crude oil: Pakistan refineries have concluded long-term commercial agreements with crude oil suppliers such as Saudi Aramco and ADNOC, and the purchase price is FOB.
The price of domestic refined oil is determined based on the import parity price (IPP) formula of the monthly average FOB of Arabian Gulf (AG).
