Pakistan reduced fuel prices by up to PKR 7 on Friday, marking the second consecutive weekly cut after record-high prices in April.
The cut was announced as global oil prices remain elevated amid stalled U.S.-Iran talks to end the war, which is disrupting global energy supplies.
What are the new petrol and diesel prices in Pakistan?
A Ministry of Energy notification said the price of petrol has been reduced by PKR 6 and diesel by PKR 6.8. The new price of petrol will be PKR 403.78 per liter, down from PKR 409.78, while high-speed diesel will be priced at PKR 402.78, down from PKR 409.58.
The new prices take effect on May 23.
Why is the U.S. war on Iran impacting fuel prices in Pakistan?
Pakistan imports the bulk of its fuel and is particularly vulnerable to fluctuations in global oil markets. The Middle East conflict has driven up energy costs and disrupted supply chains.
Brent crude settled at $102.58 a barrel on Thursday, still above $100 despite easing about 2% over the day.
Analysts expect global oil prices to stay elevated in the near term, even if the U.S. and Iran reach an agreement to end the war. This is due to the complex logistics of oil supply, which would take time to return to pre-war levels.
Petrol and diesel prices in Pakistan hit record levels after the closure of the Strait of Hormuz disrupted supplies. On April 3, petrol reached PKR 458.47 per liter and diesel PKR 520.35, the highest-ever for petrol and the second-highest for diesel.
Higher fuel costs pushed Pakistan's inflation rate to 10.9% in April. That was the first double-digit reading in 20 months.
How much did petrol and diesel sales fall in April?
Demand for petroleum products has dropped sharply due to higher prices and government austerity measures.
Diesel sales fell 7% year-on-year to 550,000 tons in April, down from 590,000 tons in March. Petrol sales dropped 8% to 615,000 tons, compared with 670,000 tons the previous month.
The sales slide reflects the squeeze on consumers from record-high pump prices and tighter household budgets.
How does the Petroleum Development Levy affect fuel prices?
Fuel prices in Pakistan are shaped by global crude rates and the government's tax structure. The Petroleum Development Levy (PDL) is a fixed amount per liter charged on petroleum products.
The PDL is a key source of non-tax revenue for the federal government. Unlike the general sales tax, it is not shared with provinces under the National Finance Commission Award.
Total petroleum levy collections reached PKR 1.33 trillion from July through April of the current fiscal year, sources said. The full FY26 collection target stands at PKR 1.47 trillion.
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