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The federal government has announced the latest revision in petroleum product prices, keeping the price of petrol unchanged while slashing high-speed diesel (HSD) by Rs3 per litre for the next fortnight.
According to a notification issued by the Ministry of Finance on Saturday, the revised prices will be effective from September 1, 2025.
New Fuel Prices Announced
As per the notification, the updated fuel prices are as follows:
- Petrol: Rs291.89 per litre (unchanged)
- High-Speed Diesel (HSD): Rs269.99 per litre (reduced by Rs3)
- Superior Kerosene Oil (SKO): Rs176.81 per litre (reduced by Rs1.46)
- Light Diesel Oil (LDO): Rs159.76 per litre (reduced by Rs2.40)
The notification further stated that the government reviewed global oil prices and the exchange rate impact before finalizing the decision.
Petrol Impact on Daily Commuters
Petrol is widely used in motorcycles, small cars, and rickshaws, which are the most common mode of transport for middle- and lower-income groups. Any fluctuation in petrol prices directly affects millions of households, making affordability a major concern for families dependent on daily commuting.
Transporters and ride-hailing services also base their fares on petrol consumption, which means a rise in petrol prices immediately trickles down to the working-class population. By keeping the petrol price unchanged, the government has attempted to provide temporary relief to the masses amid already high inflation.
Diesel Prices and Inflationary Pressure
In contrast to petrol, high-speed diesel is considered the most inflationary fuel due to its dominant role in the transport and agriculture sectors. Diesel is extensively used in:
- Goods transport vehicles including trucks and buses
- Public transport across inter-city and intra-city routes
- Railway locomotives
- Agricultural machinery such as tractors, harvesters, and tube wells
An increase in diesel prices pushes up the transportation cost of goods, directly impacting the prices of vegetables, grains, and other essential commodities. By reducing diesel prices by Rs3 per litre, the government aims to ease pressure on the supply chain and control food inflation.
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Kerosene and Light Diesel Adjustments
The government has also reduced the prices of Superior Kerosene Oil (SKO) and Light Diesel Oil (LDO). Kerosene is used in remote rural areas for cooking and lighting purposes, particularly by households without access to natural gas or electricity. Light Diesel Oil, on the other hand, is consumed in small industries and for irrigation purposes in the agriculture sector.
The price cut in these fuels is expected to offer some relief to rural communities and small-scale industries.
Broader Economic Impact
Economists highlight that while the reduction in diesel and kerosene prices will provide limited relief, the unchanged petrol price continues to burden the majority of Pakistan’s urban commuters. However, given Pakistan’s commitments under international lending programs and the fluctuating global oil market, the government’s options remain restricted.
The revision also reflects the country’s efforts to balance public relief with fiscal constraints, as subsidies on petroleum products have significant implications for the budget deficit.
