Petrol and Diesel Prices Increased for September 4
- The federal government in Pakistan raised the price of petrol by Rs2.84 per litre and high-speed diesel by Rs2.28 per litre for September 4, bringing retail costs to...
- Under a pricing mechanism announced on July 17 by Petroleum Minister Ali Pervaiz Malik, petroleum product prices are fixed on a daily basis using a seven-day average of...
- Even with the most recent modifications, authorities maintain a levy of Rs114 per litre on petrol and Rs100 per litre on diesel in taxes and duties.
The federal government in Pakistan raised the price of petrol by Rs2.84 per litre and high-speed diesel by Rs2.28 per litre for September 4, bringing retail costs to Rs349 and Rs374.31 per litre respectively, according to a Petroleum Division notification.
Daily Pricing Mechanism Replaces Weekly Reviews
Under a pricing mechanism announced on July 17 by Petroleum Minister Ali Pervaiz Malik, petroleum product prices are fixed on a daily basis using a seven-day average of international market prices. The daily adjustments replace the weekly revision system that had been in place since early March.
According to an official document, the Oil and Gas Regulatory Authority (Ogra) is authorized to issue daily ex-depot prices without requiring prior prime ministerial or federal government approval. Prices notified on Fridays remain unchanged through the weekend on Saturdays and Sundays.
Taxes, Duties, and Consumer Impact
Even with the most recent modifications, authorities maintain a levy of Rs114 per litre on petrol and Rs100 per litre on diesel in taxes and duties. Petrol is primarily used in private transport, small vehicles, rickshaws, and two-wheelers, affecting middle and lower-middle-class commuters. Diesel is predominantly consumed by the heavy transport sector, power plants, and large generators, impacting the public at large.
According to the Pakistan Economic Survey 2024-25, petroleum products represent one of the nation’s largest import categories, making the economy highly vulnerable to international crude oil price swings, which pressures foreign exchange reserves and contributes to inflation.
Global Market Pressures and Supply Volatility
The shift to daily pricing stems from ongoing volatility in international oil markets driven by renewed hostilities between the United States and Iran. The conflict that began on February 28 prompted Iran to shut the Strait of Hormuz, a critical transit route for global energy supplies.
International oil prices reached six-week highs following recent strikes and geopolitical tensions in the Middle East. Brent crude futures rose 1.7% to $97.29 a barrel, while U.S. West Texas Intermediate futures increased 2.2% to $93.04.
The oil market remains tight, with oil inventories still declining globally, translating into higher prices. Some support might have also come from ongoing tensions in the Middle East.
Import Framework Adjustments for 2026-27
Official documents show that under the petroleum framework for the 2026-27 fiscal year, Pakistan State Oil will handle all high-speed diesel imports exclusively, whereas oil marketing companies will receive authorization to bring in petrol proportional to their respective market shares. Companies failing to meet import obligations or upliftment requirements risk losing fresh import permissions for up to nine months.
