Ministry of Energy (Petroleum Division)

Oil Pricing Formula

Formula for Ex-Depot Sale Prices

1.Ex-refinery/Import Price : Linked with actual Import Price of PSO / Arab Gulf (AG)
   market prices published in Platts Oilgram.

2.Inland Freight Equalization Margin (IFEM) : This is primary freight determined
   and fixed by OGRA to keep prices uniform up to 16 OMCs depots across the

3.OMCs Distribution Margin : Fixed by GoP in Rs./Litre

4.Dealer’s Commission : Fixed by GoP in Rs./Litre

5.Petroleum Levy  : Fixed by GoP in Rs./Litre

6.Sub-Total of above items (1) to (5)

7.General Sales Tax (GST) : 17% of sub-total at (6)

8.Ex-Depot Sale Price : Sum of above items (6) & (7)


Notes :-



Pump/Retail out prices of Petrol/Diesel is worked out by adding secondary freight, depending upon

distance of outlet/pump from storage depot, in their ex-depot sale prices.





Formula for Ex-Refinery Prices
1.Average monthly FOB price : Prices of petroleum products as published in Platts
   Oilgram (AG Market)

2.Marine Freight : Published by London Tanker Brokers Panel (LTBP) on monthly

3.Premium/Discount  : Average HSD & SKO premium/discount published in Platts
   Oilgram (AG Market)

4.C&F Price : Total of above items (1) to (3)

5.Import Incidentals : Actual as per PSO imports (MS & HSD only) excluding Ocean

6.Custom/Deemed Duty : 7.5% of CIF (Only on HSD, both imported & Local)

7.Ex-Refinery Price : Sum of above items (4), (5) & (6)



Actual Import Price/Landed cost of PSO is worked out on Cargo to Cargo basis and then a weighted average landed cost/import price of

all cargoes discharged during the fortnight is determined and is applied as ex-refinery price. In case of no import during a fortnight,

then the above formula for ex-refinery is applied.



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