Pakistan may cut petrol, diesel prices for early January as oil falls

Pakistan’s government may cut petroleum product prices for the fortnight starting Jan. 1, 2026 on the back of falling global crude oil prices, a move that could help ease pressure on consumers’ purchasing power.

According to a working paper seen by Nukta, the price of petrol is likely to be cut by nearly PKR 11 per liter, while diesel could see a second consecutive reduction of about PKR 10 per liter.

The government had trimmed diesel prices by PKR 14 for the fortnight ending Dec. 31, bringing the rate down to PKR 265.65 per liter, while motor gasoline prices remained unchanged at PKR 263.45 per liter.

Analysts said a second cut in diesel prices would help lower transportation costs and could contribute to easing prices of food items, particularly vegetables and fruits.

However, another leading analyst cautioned that falling fuel prices could prompt the government to raise the petroleum development levy. Under existing regulations, the government is allowed to increase the levy to PKR 85 per liter. Currently, the levy stands at about PKR 79.62 per liter on petrol and PKR 75.41 per liter on diesel.

Global prices have declined in recent weeks. Data showed petrol prices fell by $5 to $74 per barrel, while diesel prices dropped by $4.5 to $79.40 per barrel.

Finance Ministry data showed that petroleum development levy collections totaled about PKR 372 billion in the first quarter of the current fiscal year, roughly PKR 110 billion higher than in the same period last year.

If the same trend continues through the fiscal year, total levy collections could reach about PKR 1.49 trillion, compared with PKR 1.22 trillion collected by the Federal Board of Revenue last year — an increase of around 22%, analysts said.