Pakistan has reduced the price of diesel and diesel by up to PKR 10 per liter for the next two weeks, according to an official notification issued on Wednesday.
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 10.28 per liter and that of diesel by PKR 8.57 per liter. The new price of petrol is PKR 253.17, down from PKR 263.45. High-speed diesel will now cost PKR 257.08 per liter, down from PKR 265.65.
The new prices will take effect on January 1.
The government has reduced prices due to lower global oil prices. Data showed petrol prices fell by $5 to $74 per barrel, while diesel prices dropped by $4.5 to $79.40 per barrel.
Earlier, on December 15, the government had trimmed diesel prices by PKR 14, bringing the rate down to PKR 265.65 per liter.
Analysts said a second cut in diesel prices would help lower transportation costs and could help ease the prices of food items, particularly vegetables and fruits.
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. Currently, the levy stands at about PKR 79.62 per liter on petrol and PKR 75.41 per liter on diesel.
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.
Finance Ministry data showed that PDL 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.
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