Fuel Prices Fall for Eighth Consecutive Review as New Petrol, Diesel Rates Announced

Petrol becomes cheaper by Rs3 per litre and high-speed diesel by Rs4, bringing prices to Rs332 and Rs360, respectively, as government maintains hefty petroleum taxes despite continued relief for consumers.

Hamid Khan Wazir

ISLAMABAD: Providing another round of relief to inflation-hit consumers, the federal government has reduced petrol and high-speed diesel (HSD) prices for the eighth consecutive time, cutting the price of petrol by Rs3 per litre and diesel by Rs4, with the revised rates coming into effect from Friday, November 13.

According to a notification issued by the Oil and Gas Regulatory Authority (OGRA) on Thursday, petrol will now be available at Rs332 per litre, down from Rs335, while the price of high-speed diesel has been reduced to Rs360 per litre from Rs364. The latest reduction extends the government's consecutive fuel price cuts, offering some relief to motorists, commuters, transporters and businesses amid persistent inflationary pressures and fluctuations in international oil markets.

Despite the successive reductions, petroleum products continue to carry substantial government taxes and duties. The government is collecting Rs114 per litre in taxes and duties on petrol and Rs100 per litre on high-speed diesel, reflecting the significant tax burden embedded in retail fuel prices.

Refineries to Bear Rs15 Billion Burden to Facilitate Fuel Relief

In a separate arrangement announced on November 2 for a period of 30 days, the government directed oil refineries to contribute towards the petroleum levy by absorbing a cumulative financial impact of Rs15 billion.

According to the government, the arrangement has facilitated a Rs14.71 per litre reduction in the petrol price at the consumer end, providing additional relief to the public. The move comes as the government seeks to cushion consumers against fluctuations in global petroleum prices while balancing its revenue requirements and the financial pressures associated with fuel subsidies and relief measures.

Fuel Relief Scheme Continues for Small Vehicle Owners

Meanwhile, the government had launched the Prime Minister's Fuel Relief Scheme nationwide on September 17 to ease the financial burden on lower-income segments following rising petroleum prices amid the evolving Middle East situation. The subsidy programme covers owners of motorcycles, rickshaws and vehicles with engine capacities of up to 800cc, targeting segments considered particularly vulnerable to increases in transportation and fuel expenses.

The initiative is aimed at providing targeted assistance to individuals who depend heavily on motorcycles and small vehicles for daily commuting and livelihoods.

Global Oil Prices Edge Higher Amid Geopolitical Uncertainty

The latest domestic price reduction comes as international oil prices edged higher on Thursday after recording earlier losses, with persistent geopolitical tensions in the Middle East and Russia providing support to global crude markets.

Brent crude futures rose by 65 cents to $93.40 per barrel at 7:25pm Pakistan Standard Time, while US West Texas Intermediate (WTI) crude gained one cent to reach $86.54 per barrel.

Both benchmark contracts had fallen by more than $1 per barrel during early Asian trading and remained on course for a weekly decline. Market movements continue to reflect the competing pressures of geopolitical uncertainty and rising crude oil production, with their combined impact influencing international petroleum prices.

For Pakistani consumers, the latest consecutive reduction offers some respite, although the substantial tax component in domestic fuel prices and uncertainty surrounding international oil markets remain key factors shaping future petroleum price adjustments.

Government Introduces Daily Fuel Price Review

In a significant change to the petroleum pricing system, the government has shifted towards daily fuel price reviews in response to unpredictable movements in international oil prices.

OGRA has also started publishing daily petroleum price information on its official website to improve transparency and enable consumers to track changes in fuel costs. Previously, petroleum prices were generally revised on a fortnightly basis. Following the outbreak of the US-Iran conflict on February 28, the government initially moved to weekly adjustments before introducing the latest daily review mechanism amid continuing uncertainty in global energy markets.

The revised approach is intended to ensure that changes in international oil prices are reflected more promptly in domestic petroleum rates.

Government Maintains Heavy Petroleum Taxes

Despite the latest reduction, petroleum products continue to carry substantial taxes and duties, adding to the financial burden on consumers. The government is currently collecting approximately Rs114 per litre in taxes and duties on petrol and Rs100 per litre on high-speed diesel.

Meanwhile, under an arrangement announced on November 2 for a period of 30 days, oil refineries will contribute towards the petroleum levy by absorbing a cumulative financial impact of Rs15 billion. According to the government, this arrangement has enabled a reduction of Rs14.71 per litre in the consumer price of petrol through adjustments involving refinery pricing and petroleum levy calculations.

Revised Pricing Formula to Pass on International Oil Changes

The federal cabinet approved changes to the petroleum pricing mechanism on October 30 to address volatility in international markets following the US-Iran conflict.

Under the revised formula, the import price of petrol is determined using the actual import cost of the relevant Pakistan State Oil (PSO) cargo. Where the actual cost of a cargo is unavailable for daily price calculations, the premium, incidental expenses and customs duty applicable to the last available cargo are used instead.

For domestic refineries, the government has temporarily maintained the premium, incidental expenses and customs duty used in calculating ex-refinery petrol prices at their March 7, 2026, pre-war levels for 30 days. The difference between the import price and the resulting ex-refinery price is to be surrendered by refineries under the petroleum levy account, with the financial benefit passed on to consumers through corresponding reductions in petrol prices.

The government has also introduced a temporary adjustment mechanism to smooth fluctuations in petrol prices by incorporating the benefit arising from the premium differential at a rate of $2.950 per barrel per day.

Fuel Prices Fall From April's Record Highs

The latest reduction comes after petrol and diesel prices witnessed unprecedented increases following the outbreak of hostilities involving the United States, Israel and Iran on February 28. High-speed diesel had surged to a record Rs520.35 per litre on April 3 after rising from approximately Rs281 per litre before the conflict.

Petrol prices also reached an all-time high of Rs458.41 per litre on April 3, having climbed from around Rs266 during the first week of March. Although subsequent reductions have brought prices down considerably from their April peaks, fuel remains an expensive commodity for households and businesses.

Middle East Tensions Keep Global Oil Markets Under Pressure

International oil markets remain sensitive to developments in the Middle East, particularly uncertainty surrounding Iran, Washington and the security of regional energy supplies.

The conflict that began on February 28 disrupted energy shipments after Tehran moved to close the Strait of Hormuz, a critical global shipping route that previously handled approximately one-fifth of the world's energy supplies. Tensions have intensified following the collapse of a fragile ceasefire between Tehran and Washington in June, raising concerns about renewed military confrontation and further disruptions to international oil shipments.

Global crude prices also advanced on Wednesday after Iran's security chief declared that Tehran would not allow any enriched nuclear material to leave the country, reviving concerns over the prospects for negotiations and the stability of energy supplies. Brent crude futures increased by $2.15, or 2.35 per cent, to $93.64 per barrel, while US West Texas Intermediate (WTI) crude gained $1.69, or 1.96 per cent, to $87.73 per barrel, according to market figures reported on Wednesday.

Washington has maintained that Iran's nuclear programme must be included in any initial negotiations aimed at ending the US-Israeli war against Iran.

Fuel Costs Remain Critical for Households and Businesses

Petrol and high-speed diesel are among Pakistan's most important petroleum products, and their prices have a direct impact on transportation costs, inflation and the overall cost of living. Petrol is predominantly consumed by private vehicles, motorcycles, small cars and rickshaws, making price changes particularly significant for middle- and lower-middle-income households.

Diesel, meanwhile, plays a central role in the country's transport and logistics networks, agricultural machinery, power generation and large industrial generators. Any substantial change in its price can affect freight charges, food transportation and the cost of essential commodities.

Petrol and high-speed diesel are also the country's major petroleum revenue-generating products, with monthly sales estimated at 700,000 to 800,000 tonnes each, compared with approximately 10,000 tonnes of monthly kerosene demand.

Fuel Relief Scheme for Motorcyclists and Small Vehicles

Separately, the government launched the Prime Minister's Fuel Relief Scheme nationwide on September 17 to reduce the impact of rising petroleum costs on financially vulnerable segments of society. The scheme covers owners of motorcycles, rickshaws and vehicles with engine capacities of up to 800cc.

The latest petroleum price reduction, alongside the revised pricing mechanism and targeted relief measures, forms part of the government's efforts to manage the economic consequences of international energy market volatility.