Dealers Demand Refinery Audit to Cut Fuel Prices

Petroleum dealers have demanded an immediate, transparent and comprehensive forensic refinery audit, saying a review of refinery finances could cut fuel prices by Rs40 to Rs50 per litre. The call follows a sharp rise in refinery profits during the first quarter of the current financial year.

The Pakistan Petroleum Dealers Association said the government should order an independent and impartial examination of refinery profits, production costs, pricing mechanisms and other financial matters.

According to Topline Securities figures cited by Dawn, refinery sector profitability rose to Rs32.2 billion in the first quarter of financial year 2027, from Rs1.6 billion in the same quarter a year earlier and Rs1.1 billion in the previous quarter. The rise was mainly due to higher gross refining margins amid the United States-Iran war.

What a refinery audit would examine

Association chairman Malik Khuda Bakhsh and senior leaders said the petroleum minister’s recent statement on extraordinary refinery profits confirmed concerns the association had raised before. They said refineries had earned unusually high profits, and ordinary consumers had borne the impact.

The dealers said the minister had revealed that refineries earned, in just three months, profits equal to what they would normally generate in a full year. They described that disclosure as a serious concern.

A refinery audit, in their proposal, would cover financial records, expenditures, crude oil procurement costs, production expenses and revenues from the sale of petroleum products. It would also test how much of the financial burden was passed on to consumers, directly or indirectly.

The dealers added that relief for consumers should not be portrayed as an extra burden on refineries, and a genuine cut is possible if margins leave room for one.

Consumers face pressure on every front, dealers say

The association linked its demand to the wider squeeze on households. Consumers already face inflation, high electricity and gas tariffs, rising transport costs and higher prices for essential goods. In that setting, the dealers said, a real cut in petroleum prices would bring substantial relief to the public.

That argument lands days after fuel prices were cut for consumers. Petrol Price Cut to Rs369.06 for November 4 gave motorists relief at the pump. The dealers say an audit could show whether a larger cut is possible, rather than leaving the question to claims from either side.

The report carried no response from the refineries to the audit demand. The refineries have, however, made their own case to the government in recent days, and that case points in the opposite direction.

The other side of the argument: refineries warn on viability

Four major refineries recently urged the government to reverse a Rs49.02 per litre petrol levy differential. Refineries Urge Reversal of Petrol Levy Differential covered their joint letter, which warned that the October 31 pricing formula threatens their viability and planned upgrades.

Those refineries, Attock Refinery, Cnergyico PK, National Refinery and Pakistan Refinery, said local pricing components were frozen at March 7, 2026 levels while imported petrol was priced on current cargo costs. They must surrender the Rs49.02 gap as petroleum levy, with no matching adjustment to their ex-refinery prices.

The two disputes now frame the same question from opposite sides. Refineries say the current formula squeezes them and puts Brownfield upgrade spending at risk. Dealers say the profit surge shows consumers are paying too much, and only a forensic audit can settle who is right.

The wider levy debate has also run through parliament. JI Says Fuel Relief Agreed, Levy Fight Goes On covered talks between the government and Jamaat-e-Islami over the petroleum levy. That dispute centred on relief for consumers. This one centres on the accounts behind the pump price.

Dealers want a seat at the policy table

The association also criticised how petroleum policy is made. It said consulting only refineries and other relevant institutions when taking important decisions was insufficient. Petroleum dealers, it said, should be an integral part of the policymaking process, and the government should benefit from their practical experience and understanding of market conditions.

For now, the Rs40 to Rs50 per litre figure remains a dealers’ claim, not an established finding. An audit would test it against audited costs, crude prices, margins and taxes. Until that work is done, motorists should treat the figure as an argument for a review, not as a promised cut.

What is not in doubt is the profit jump that prompted the demand. Sector profit of Rs32.2 billion in one quarter, against Rs1.6 billion a year earlier, is the figure both sides will have to explain. An independent audit would give the government, the industry and consumers a shared set of numbers to argue from.

Frequently asked questions

What is a refinery audit?

It is an independent forensic examination of a refinery’s financial records, expenditures, crude oil procurement costs, production expenses and revenues, to establish how profits were earned and what consumers paid.

Who is demanding the refinery audit?

The Pakistan Petroleum Dealers Association, led by chairman Malik Khuda Bakhsh, has called for an immediate, transparent and comprehensive forensic audit of all oil refineries.

How much could fuel prices fall, according to dealers?

Dealers say an audit could allow cuts of Rs40 to Rs50 per litre. That figure is their claim, not an established finding, and it would need to be tested against audited costs and margins.

Why did refinery profits rise so sharply?

According to Topline Securities figures cited by Dawn, sector profitability rose to Rs32.2 billion in the first quarter of financial year 2027, from Rs1.6 billion a year earlier, mainly due to higher gross refining margins amid the United States-Iran war.

How does this relate to the refineries’ levy complaint?

Four major refineries recently warned that a Rs49.02 per litre levy differential threatens their viability and upgrades. Dealers say the profit surge shows consumers are paying too much. A forensic audit would test both claims against the same accounts.