High-Speed Diesel Faces the Sharpest Increase
Petrol and diesel prices are expected to rise sharply in Pakistan’s upcoming fuel review, placing fresh pressure on households, transporters and businesses.
Preliminary calculations suggest that high-speed diesel could increase by as much as Rs40 per litre. Petrol may become around Rs10 per litre more expensive. The revised prices are expected to take effect from July 18.
The estimates are based on the early days of international price assessments used to calculate Pakistan’s fuel rates. The final increase may change after the remaining global pricing data is included.
The government will also decide whether the full international cost should be transferred to consumers. Officials are examining possible adjustments to taxes and levies before issuing the final notification.
Petrol currently costs Rs310.71 per litre, while high-speed diesel stands at Rs323.30 per litre following an increase announced on July 10.
If the estimated increases are passed on completely, petrol could reach around Rs320.71 per litre. Diesel could climb to approximately Rs363.30 per litre.
These figures remain projections and should not be treated as officially announced prices.
Government Considers Cutting Petroleum Levy
Officials are considering reducing the petroleum levy to limit the impact of the expected increase.
The levy is one of several charges included in the retail price of fuel. Reducing it could allow the government to absorb part of the international price increase instead of transferring the entire burden to consumers.
The petroleum levy on high-speed diesel currently stands at about Rs80 per litre. Petrol carries a levy of approximately Rs70 per litre. Both products are also subject to the climate support levy and other charges.
A levy reduction could provide temporary relief. However, it may also reduce government revenue at a time when Pakistan is under pressure to maintain fiscal discipline.
The final decision will depend on global oil prices, the exchange rate, existing tax commitments and the government’s ability to absorb part of the cost.
The increase is being linked to rising international petroleum prices amid renewed tensions in the Middle East. Pakistan depends heavily on imported fuel, making domestic prices vulnerable to global market movements.
A sustained increase in international oil prices can raise Pakistan’s import bill and place additional pressure on inflation, foreign exchange reserves and the wider economy.
Diesel Hoarding Reports Trigger Government Action
Reports of possible diesel hoarding have emerged ahead of the expected price announcement.
Fuel sales during the first half of July reportedly rose well above normal consumption levels. Officials are investigating whether some dealers and distributors purchased additional stocks to benefit from the expected price increase.
Several filling stations have reportedly experienced temporary diesel shortages. However, officials maintain that Pakistan’s overall petroleum stocks remain sufficient to meet current demand.
The situation was reviewed during a meeting of the National Committee on Monitoring and Coordination.
Representatives from the Oil Companies Advisory Council, the Oil and Gas Regulatory Authority and other government departments attended the meeting.
OGRA was directed to increase market monitoring and take action against speculative practices.
Provincial governments were also asked to inspect fuel stations and identify businesses involved in hoarding or creating artificial shortages.
Oil marketing companies have been instructed to maintain uninterrupted supplies across the country.
Officials have urged consumers to avoid panic buying. Sudden increases in demand can create temporary shortages even when national inventories remain adequate.
Higher Diesel Price Could Raise Transport and Food Costs
A major diesel increase would have a wider economic impact than a petrol adjustment alone.
High-speed diesel is widely used by trucks, buses, agricultural machinery, industrial equipment and large electricity generators.
A Rs40-per-litre increase could raise freight and public transport costs. Businesses may pass these higher expenses on to consumers through increased prices for food and other essential products.
Farmers could also face higher costs for tractors, tube wells and the transportation of crops.
Petrol is used mainly in cars, motorcycles and smaller commercial vehicles. A Rs10 increase would directly affect daily commuters and households already facing high living costs.
The expected fuel adjustment could therefore add fresh inflationary pressure shortly after the government increased both petrol and diesel prices on July 10.
The government is expected to announce the final rates after reviewing recommendations prepared by the relevant regulatory and petroleum authorities.
Until the official notification is issued, the reported Rs40 diesel increase and Rs10 petrol increase remain preliminary estimates.
