Refinery audit could cut fuel prices by Rs40-50 per litre, say petroleum dealers

Karachi: Petroleum dealers have urged for an urgent, open and thorough forensic audit of the nation's oil refineries. They argue that a financial review of these facilities could result in price reductions of Rs40-50 per litre for consumers. The Topline Securities reports that refinery profitability surged to Rs32.2bn in the first quarter of fiscal year 2027 from Rs1.6bn in the same period in 2026 and Rs1.1bn in the fourth quarter of 2026, primarily due to higher Gross Refining Margins (GRMs) caused by the US-Iran conflict.

The PPDA Chairman Malik Khuda Bakhsh and senior officials confirmed the petroleum minister's remarks on abnormally high refinery profits, echoing the association's prior worries. They claim the ministry revealed that three months of refinery profits equaled one year's normal earnings, which they deemed an alarming situation. They demanded an impartial examination of refinery profits, production costs, pricing methods, and other financial aspects to determine the truth.

The PPDA representatives proposed that the government order a comprehensive forensic audit of all refineries' financial records, expenditures, crude oil purchasing costs, production expenses, and revenues from petroleum product sales. They argued that such an audit would reveal the reasons behind refineries' unusually high profits and identify how much of the financial burden was passed on to consumers. They emphasized that consumer relief should not be viewed as an additional financial strain on refineries.

The PPDA leaders noted that consumers are already struggling with economic hardships due to inflation, high electricity and gas tariffs, rising transportation costs, and increasing prices of essential goods. They argued that a genuine reduction in petroleum prices would offer significant relief to the general public. They emphasized the need for the involvement of petroleum dealers in decision-making regarding the petroleum sector to guarantee balanced, practical, and effective policies through input from all stakeholders.

The government, they stated, should include petroleum dealers in the policy-making process and utilize their practical experience, suggestions, and understanding of market conditions.