Petrol, diesel prices in Pakistan go up by PKR 7.32

Pakistan has increased the prices of petrol and diesel by up to PKR 7.32 for the next two weeks.

A Finance Ministry notification issued on Sunday said the price of petrol has been increased by PKR 5 per liter to PKR 258.17. The price of diesel has been increased by PKR 7.32 to PKR 275.7 per liter.

The new prices will take effect from Monday.

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

On January 31, the government increased the price of diesel by PKR 11.3 per liter. The price of petrol was kept 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 collection of PDL in the six months ending December 31 reached PKR 823 billion, up nearly 50% from PKR 549 billion in the same period last year.

Analysts estimate that net levy collections could surpass PKR 1,450 billion in FY 2026, up from PKR 1,220 billion in FY 2025.

The government can impose a maximum PDL of PKR 90 per liter on petrol and diesel under the Finance Act 2025. Currently, the levy on petrol and High Octane Blending Component (HOBC) is PKR 84.27 per liter, while that on high-speed diesel is PKR 76.21.

Consumers of kerosene and light diesel oil are also subject to petroleum levies of PKR 20.36 and PKR 15.84 per liter, respectively.

In addition to the PDL, the government collects a Climate Support Levy of PKR 2.50 per liter on petrol, high-speed diesel and HOBC.

The taxation essentially means that 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.

Fuel prices are further affected by the Inland Freight Equalization Margin, which stands at PKR 8.97 per liter for petrol and PKR 7.25 per liter for high-speed diesel, aimed at ensuring uniform prices across the country.