Government Cuts Diesel Price, Increases Petrol Rate
Following successful talks with petroleum refineries, the government cut the price of high-speed diesel by Rs32.63 per litre while raising petrol prices by Rs2.97 per litre, according to a notification from the Petroleum Division.
The revision takes effect on August 20, pushing petrol to retail at Rs337.51 per litre. High-speed diesel will now cost Rs363.06 per litre. Despite the adjustment on diesel, the government maintains a tax and duty levy of Rs114 per litre on petrol and Rs100 per litre on diesel.
Fuel Price Trajectory and International Market Pressures
Diesel prices dropped significantly from an earlier peak of Rs520.35 recorded on April 3. That spike followed an upward trajectory that began at Rs281 per litre after the outbreak of the US-Iran war on February 28, according to official data. Petrol followed a similar pattern, peaking at Rs458.41 on April 3 after starting from Rs266 in the first week of March.
Petroleum Minister Ali Pervaiz Malik announced that fuel prices will now be fixed on a daily basis. The change responds directly to fluctuations in international market prices driven by renewed hostilities between Iran and the US. Since early March, authorities had relied on weekly revisions alongside fuel conservation measures to manage potential oil supply disruptions stemming from Middle Eastern conflict. In April, the federal government also launched targeted relief measures to provide subsidised fuel.
Regulatory Shift and Economic Impact on Consumers
The federal cabinet and the prime minister decided to transfer direct pricing authority to the Oil and Gas Regulatory Authority. Under the new framework, Ogra will determine fuel prices daily based strictly on international market trends, according to the petroleum minister.
The price adjustments carry distinct effects across different economic sectors. Petrol primarily fuels private transport, small vehicles, rickshaws, and two-wheelers, meaning retail changes directly impact middle and lower-middle-class households.
Diesel shapes broader commercial costs because the heavy transport sector, power plants, and large generators rely on it heavily. Together, petrol and high-speed diesel represent the country’s major petroleum revenue earners, generating monthly sales of roughly 700,000 to 800,000 tonnes, contrasting sharply with kerosene demand, which sits at just 10,000 tonnes monthly.