Pakistan hikes fuel prices by PKR 27 as oil jumps over stalled US-Iran peace talks

Pakistan has increased the prices of petrol and diesel by PKR 27 as global oil rates jump over a lack of progress in the peace talks between the U.S. and Iran.

The new price of petrol is PKR 393 and diesel price is PKR 380 per liter. The rates will be effective from April 25

Last week, the government reduced the price of diesel by PKR 32.12 per liter to PKR 353.43 per liter. The price of petrol was kept unchanged at PKR 366.58.

Oil prices were volatile on Friday as traders weighed supply disruptions against peace talks between the U.S. and Iran potentially resuming.

At 6 pm PST, Brent crude futures were down 29 cents, or around 0.3%, at $104.78, and U.S. West Texas Intermediate futures were down $1, or around 1.1%, to $94.83.

Since the start of this week, Brent is up about 16% and WTI 14%, the second-largest weekly gains since the war began.

Pakistan's petroleum on Friday said the government is being compelled to pass on the burden of higher oil prices to consumers due to sustained increases in the international market and existing agreements with global partners.

“The government absorbed as much of the global increase in petroleum prices as possible,” the minister said, adding that both federal and provincial governments had already provided what he described as a historic relief package to the public.

Officials expressed hope that regional stability would improve in the near future, allowing authorities to ease fuel prices and provide relief to consumers.

Pakistan, which relies heavily on imported fuel, is particularly vulnerable to fluctuations in global oil markets. Rising fuel costs often lead to higher transportation and food prices, adding to inflationary pressures faced by citizens across the country.

Petrol and diesel prices had shot to record levels in Pakistan after the closure of the Strait of Hormuz disrupted global supplies.

On April 3, the price of petrol was increased by PKR 137.3 per liter to PKR 458.47 and that of diesel by PKR 184.49 to PKR 520.35 per liter. Later, petrol was lowered by PKR 80.

Before raising the prices, the government gave a subsidy of around PKR 130 billion by keeping the prices unchanged for two weeks even as global prices rose steeply.

Petroleum levy

Fuel prices in Pakistan are influenced not only by global crude prices but also by the government’s tax structure, particularly the Petroleum Development Levy (PDL).

The PDL is a fixed amount per liter levied on petroleum products. It is a key source of non-tax revenue for the federal government because, unlike the general sales tax, which must be shared with provinces under the National Finance Commission Award, the petroleum levy remains entirely with the federal government.

Pakistan collected more than PKR 180 billion in PDL during the past six weeks amid heightened tensions linked to the U.S.-Iran conflict, according to finance ministry sources.

Total petroleum levy collections reached PKR 1.234 trillion in the current fiscal year from July through mid-April, significantly higher than the same period last year, sources said. The figure marks an increase of nearly PKR400 billion compared with the corresponding period of the previous fiscal year.

In March alone, the government collected PKR 52 billion more than it did in March of fiscal year 2024–25, reflecting higher fuel consumption and sustained levy rates.