How petrol and diesel prices are set

The Oil and Gas Regulatory Authority (OGRA) works out the maximum price of petrol and high speed diesel and notifies it, now on most working days. Each new price comes into force at midnight and stays until the next notice.

The calculation starts from the international price: a seven-working-day average of the Platts Arab Gulf price for petrol, and of Dubai crude plus the diesel margin for HSD, together with the cost of shipping it to Karachi. That dollar cost is converted at the State Bank's seven-day average exchange rate. Customs duty, inland freight, the oil company and dealer margins and the government levies are then added on top.

What makes the price go up or down

Because the price follows a rolling seven-day average, it moves in small steps rather than big jumps. Four things drive it:

  • Global oil prices: a rise in Gulf petrol or diesel prices reaches Pakistani pumps within about a week.
  • The rupee–dollar rate: fuel is bought in dollars, so a weaker rupee raises the price even when world oil prices are flat.
  • Government levies: the petroleum levy and climate support levy (Rs 85.00 per litre together today) are set by the federal government and change with the budget.
  • Margins and freight: oil company and dealer margins are fixed by the government and revised from time to time.

Types of fuel sold in Pakistan

  • Petrol (Super, 92 RON): the regular petrol for cars and motorcycles, with a government-set maximum price.
  • High Speed Diesel (HSD): used by tractors, combine harvesters, trucks, buses and diesel tubewell engines. It is the fuel that matters most for farming costs.
  • High octane (HOBC, 97 RON): premium petrol. Its price is not set by OGRA, so each oil company decides it and it varies by brand.
  • Kerosene oil: used for cooking, lighting and some heaters in areas without gas; notified weekly.
  • Light Diesel Oil (LDO): a heavier diesel used in some industrial burners and older pump engines.
  • LPG: sold by weight in cylinders for cooking and heating; OGRA sets a maximum price every month.
  • CNG: OGRA no longer notifies a CNG price, so stations set their own rates.

Why the diesel price matters to farmers

Almost every powered job on a Pakistani farm runs on diesel: ploughing and seedbed preparation, sowing, harvesting with combines and threshers, carting produce to the mandi and running diesel tubewells. Fuel is often the largest running cost of a tractor after the instalment, so a change of a few rupees a litre shows up quickly in the cost per acre, especially in the busy wheat and rice seasons.

With diesel at Rs 396.24 per litre today, a rotavator pass on 10 acres at about 5 litres an acre costs roughly 50 litres of diesel. Use the calculator above for your own jobs.

How to save diesel on the farm

  • Keep the air filter clean and service the injectors on time; a choked filter or worn injector quietly burns more fuel.
  • Match the implement to the tractor's horsepower; an oversized implement makes the engine labour, an undersized one wastes trips.
  • Use the right gear and engine speed: for lighter work, shift up and throttle back instead of running at full revs.
  • Check tyre pressure and wheel slip; too much slip in the field wastes both diesel and time.
  • Avoid long idling, and plan field routes so the tractor travels less without working.
  • Buy from a trusted pump and check the meter; adulterated or short-measured diesel costs more than it saves.