Pakistan cuts petrol, diesel prices by PKR 22 for one week

Pakistan reduced fuel prices by PKR 22 per liter on Friday, marking the third consecutive weekly cut as global oil prices ease.

An announcement by the Prime Minister's Office said the new rates will take effect on May 30.

What are the new petrol and diesel prices in Pakistan?

The new price of petrol will be PKR 381.78 per liter, down from PKR 403.78, while high-speed diesel will be priced at PKR 380.78, down from PKR 402.78.

The latest cut is the third in a row. On May 23, the government reduced petrol by PKR 6 and diesel by PKR 6.80 per liter.

Before that, on May 16, prices were cut by PKR 5 per liter for both fuels. Petrol has now dropped by a cumulative PKR 33 and diesel by PKR 33.8 over the three reviews.

Prime Minister Shehbaz Sharif said the government had promised to provide relief whenever fiscal space allowed. "Providing relief to the people is among my top priorities," he said in the statement.

Why are global oil prices falling?

The reduction in prices have come as global oil stabilized in the global market on hopes of a breakthrough in the U.S.-Iran talks to end hostilities in the Middle East.

Brent crude has traded lower in recent weeks amid improving supply expectations.

Pakistan imports the bulk of its fuel and is particularly vulnerable to fluctuations in global oil markets.

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 PDL 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. The full FY26 collection target stands at PKR 1.47 trillion.

For FY27, the IMF has proposed raising the PDL target by 18% to PKR 1.73 trillion. The petroleum levy could rise to PKR 100 per liter under the proposal, meaning future cuts may be limited even if global oil prices keep falling.