After record hike, Pakistan cuts petrol, diesel prices by PKR 5 for one week

Pakistan has reduced fuel prices by up to PKR 5 on Friday as oil prices stabilize amid stalled U.S.-Iran talks to end the war which has disrupted global energy supplies.

The new prices take effect on May 16.

The cut, even though modest, will give some respite to people reeling under record-high fuel prices. Since March 1, the price of petrol has gone up by PKR 140 per liter and diesel by PKR 134.

What are the new petrol and diesel prices in Pakistan?

From May 16, petrol will sell at PKR 409.78 per liter while high-speed diesel will be priced at PKR 409.58 per liter.

The increase follows last week's hike of PKR 14.92 on petrol and PKR 15 on diesel.

Why are fuel prices rising 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.

Petrol and diesel prices hit record levels after the closure of the Strait of Hormuz disrupted supplies.

On April 3, petrol hit PKR 458.47 per liter and diesel reached PKR 520.35 per liter. That was the highest-ever price for petrol and the second-highest for diesel.

Before raising prices, the government absorbed a subsidy of around PKR 130 billion. It kept prices unchanged for two weeks even as international rates climbed sharply.

How are rising fuel prices affecting Pakistan's economy?

Petrol prices averaged PKR 375 per liter in April, up 21% from PKR 310 in March. High-speed diesel rose 26% to an average of PKR 410, up from PKR 325.21 the previous month.

Higher fuel costs pushed Pakistan's inflation rate to 10.9% in April. That was the first double-digit reading in 20 months.

Demand for petroleum products has dropped sharply due to higher prices and government austerity measures.

How much did petrol and diesel sales fall in April?

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.