- Petrol price reduced from Rs299.50 to Rs297.53 per litre.
- Diesel price reduced from Rs311.47 to Rs309.50 per litre.
- New fuel prices come into effect immediately upon notification.
The federal government has announced a further reduction in fuel prices, reducing the rates of petrol and diesel by Rs 1.97 per liter with immediate effect.
Following the weekly review, petrol will now sell at Rs 297.53 per liter from Rs 299.50, while diesel has been reduced to Rs 309.50 per liter from its previous level of Rs 311.47, according to a notification issued by the Petroleum Division on Friday evening.
The cut marks the first change in retail fuel prices since June 19, when the government reduced the rates of petrol and diesel by Rs 74 and Rs 67 per liter respectively, in one of the biggest reductions in recent years.
The relief, announced by Prime Minister Shehbaz Sharif, follows a sharp drop in international crude prices following the US-Iran peace deal and the reopening of the Strait of Hormuz – a vital corridor for global energy shipments whose closure had previously fueled fears of a supply shortage.
Since then, prices have remained stable in two consecutive weekly reviews, even as the government has quietly recalibrated the tax structure that underpins fuel costs.
The structure of levies revised again
Along with the price revision, the government also adjusted the oil tax levied on the two fuels.
The levy on petrol was increased by Rs 6.22 per litre, taking it from Rs 64.14 to Rs 70.36 per litre, while the levy on diesel was reduced by the same margin, bringing it down from Rs 77.04 to Rs 70.82 per litre.
Petroleum tax on kerosene remains unchanged at Rs 20.36 per litre.
A separate notification confirming the revised oil tax has been issued alongside the price notification.
The price of kerosene increases
In another move, the Oil and Gas Regulatory Authority (OGRA) increased the price of kerosene by Rs 4.09 per liter, taking it to Rs 231.14 from its previous rate of Rs 227.05. The increase, notified by the OGRA, came into effect from today.
On July 2, the petroleum division doubled the climate support tax on petrol and diesel from Rs 2.50 to Rs 5 per litre, while reducing the tax on petroleum by the same margin – a move intended to keep retail prices unchanged for consumers despite the change in how the levies were distributed.
This week’s reduction, while relatively modest, provides further relief to households and businesses still having to adjust to the sharp price swings seen over the past fortnight. Gasoline remains the fuel of choice for commuters using motorcycles, rickshaws and smaller vehicles, meaning any downward movement is felt most directly by middle- and low-income households who rely on it for their daily commute.
Diesel, meanwhile, continues to have an outsized weight in Pakistan’s inflation dynamics, given its dominant use in the transportation and agricultural sectors – from heavy trucks and buses to tubewells, tractors and threshers. A cheaper diesel rate, even by a fraction, typically trickles down to transportation and farming costs over time.
The government is expected to review fuel prices next week, in line with its usual schedule, with any further movement likely to depend on the trajectory of international crude oil prices and the performance of the rupee against the dollar.
