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Massive Hike Announced
The federal government on Thursday announced a sharp increase in petroleum product prices, raising petrol to Rs458.40 per litre and high-speed diesel to Rs520.35 per litre . The hike of approximately Rs137 per litre represents one of the largest single increases in Pakistan’s history.
Petroleum Minister Ali Pervaiz Malik, addressing a joint press conference with Finance Minister Muhammad Aurangzeb, said the decision was unavoidable due to a significant surge in international crude oil prices . “The ongoing conflict in the region has disrupted energy markets and triggered extreme volatility,” he said .
Price Breakdown
| Product | Previous Price | New Price | Increase |
|---|---|---|---|
| Petrol | Rs321.17 | Rs458.40 | +Rs137.23 |
| High-Speed Diesel | Rs335.86 | Rs520.35 | +Rs184.49 |
Prices effective from midnight April 2, 2026
Why the Hike?
The increase comes after Prime Minister Shehbaz Sharif rejected two previous summaries for price hikes over the past three weeks, choosing to absorb the cost . The federal government contributed Rs129 billion to maintain prices, while also cutting Rs100 billion from the Public Sector Development Programme (PSDP) to create fiscal space .
However, the gap between domestic and international prices had widened to approximately Rs100 per litre for petrol and over Rs200 per litre for diesel . Global oil markets have experienced extreme volatility since the outbreak of the US-Israeli war on Iran on February 28, with international diesel prices jumping over 15 percent in a single day .
IMF Agreement and Fiscal Pressure
Pakistan has assured the International Monetary Fund (IMF) that it will pass on any rise in global fuel prices to consumers, as maintaining subsidies would strain public finances . The government had already raised the petroleum levy on petrol to Rs82 per litre before the Iran crisis, as part of efforts to meet the IMF’s annual target of Rs1.468 trillion .
Inflation has already climbed to 7.3% in March, its highest level in 17 months, driven largely by rising fuel, electricity and gas prices .
Government’s Response
Prime Minister Shehbaz Sharif has called for the Centre and provinces to jointly reprioritize spending to provide relief to vulnerable segments . The government is also exploring targeted subsidies for specific groups, including motorcyclists and farmers, rather than maintaining broad-based price support .
The IMF has introduced a condition to increase quarterly payments under the Benazir Income Support Programme (BISP) by 35%, raising the stipend from Rs14,500 to Rs19,500 starting January 2027 .
Regional Impact
Pakistan joins over 85 countries facing fuel price surges following the Iran war . Two Pakistani ships that were waiting to move through the Strait of Hormuz have crossed due to diplomatic efforts, with arrangements made for 20 additional Pakistani-flagged vessels to pass through in recent days .
