Pakistan Slashes Petrol Price by Rs 3, Diesel by Rs 7 Per Litre

Petrol price reduced to Rs 335 per litre and high-speed diesel to Rs 364; new rates take effect November 12 as global oil volatility prompts daily pricing mechanism

Hamid Khan Wazir

ISLAMABAD: In a welcome relief for inflation-stricken consumers, the federal government has announced a reduction of Rs3 per litre in petrol prices and Rs7 per litre in high-speed diesel (HSD), raising hopes of easing the relentless pace of inflation that has made life increasingly difficult for ordinary citizens.

Under the revised petroleum prices, petrol will now be available at Rs 335 per litre, down from Rs 338, while the price of high-speed diesel has been reduced from Rs 371 to Rs 364 per litre. The new rates will take effect from Thursday, November 12, according to a notification issued by the Oil and Gas Regulatory Authority (OGRA).

The latest adjustment comes as the government moves towards a daily petroleum pricing mechanism to respond more quickly to fluctuations in global oil markets, particularly amid renewed tensions in the Middle East.

Petrol and Diesel Prices Revised

According to the revised petroleum prices, consumers will receive the following relief:

Petroleum Product | Previous Price | New Price | Reduction |

|-----------------------|-------------------:|------------:|-------------:|

| Petrol                    | Rs 338              | Rs335       |   Rs3        |

| High-Speed Diesel | Rs371             | Rs364        |   Rs7        |

The reduction is expected to provide some relief to motorists, transport operators and businesses, although petroleum costs remain considerably higher than their pre-war levels.

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.