Fuel prices reduced by PKR 5 for two weeks in Pakistan

Pakistan has reduced the price of petrol and diesel by up to PKR 5 for the next two weeks, according to an official notification issued on Sunday.

The government revises the prices of petroleum products every fortnight in line with changes in global oil prices.

According to the Ministry of Finance notification, the price of petrol has been reduced by PKR 2 and that of high-speed diesel by PKR 4.79 per liter. The new price of petrol is PKR 263.45, down from PKR 265.45, while the high-speed diesel will now cost PKR 279.65, down from PKR 284.44.

The new prices will take effect on December 1.

Earlier, on November 15, Pakistan increased the price of diesel by PKR 6, while keeping petrol prices unchanged.

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 in the hands of the federal government.

As part of commitments made under the International Monetary Fund program, Pakistan has gradually increased the levy on petrol and diesel in recent months.

The government can impose a maximum PDL of PKR 90 per liter on petrol and diesel under the Finance Act 2025. At present, the PDL on diesel is around PKR 77 per liter and that on petrol PKR 78 per liter. Even when global oil prices fall, domestic price reductions may be limited if the government chooses to maintain or increase the levy to meet fiscal targets.

Earlier this year, Pakistan increased PDL on petrol by PKR8 per liter and on diesel by PKR 7 per liter.

Prime Minister Shehbaz Sharif said the additional revenue collected from PDL would be spent on development projects, particularly the upgradation of the N-25 National Highway – a vital road connecting Pakistan’s biggest city, Karachi, to Chaman on the border with Afghanistan in Balochistan.

Last month, Federal Minister for Petroleum Ali Pervaiz Malik told the Senate that the government has collected over PKR 66 billion since the PDL was increased in April till September.

During the previous fiscal year 2024-25, the government collected a record-breaking PKR 1.22 trillion in PDL, up 20% from PKR 1.02 trillion collected in the previous year, according to official data.