Pakistani motorists will see some modest relief at the pump starting Tuesday as the federal government trims the cost of both petrol and high-speed diesel, backed by an unusual financial arrangement carved out with local oil refineries.
According to a notification issued by the Oil and Gas Regulatory Authority (Ogra), petrol prices drop by Rs3.40 per litre to settle at Rs374.51. High-speed diesel (HSD) sees a sharper cut of Rs7.76 per litre, bringing its retail price down to Rs395.20.
The adjustments bring down fuel costs from highs recorded earlier in the year following the outbreak of the US-Iran war on February 28. HSD had soared to a peak of Rs520.35 per litre on April 3 after starting its ascent from Rs281 per litre. Petrol followed a similar trajectory, climbing from Rs266 in the first week of March to a peak of Rs458.41 on April 3.
Refinery Contributions Ease the Burden
Behind the latest price revision is a new burden-sharing mechanism negotiated between Islamabad and domestic oil refineries. The government continues to levy Rs114 per litre on petrol and Rs100 per litre on diesel. However, refineries have agreed to absorb a cumulative monthly impact of Rs15 billion to prevent an even steeper hike.
“The [petroleum levy] impact on estimated total country volume of Rs. 14.71/litre shall be surrendered by refineries @ Rs49.02/litre on their sales to [oil marketing companies],” an Ogra document states.
During a joint press conference in Islamabad, Petroleum Minister Ali Pervaiz Malik and Information Minister Attaullah Tarar detailed the arrangement. Malik expressed gratitude to the industry for stepping in after posting profits over the previous three months.
“They were requested to take a step to support the public during this difficult time, and I am glad that they listened to us … the Rs15 increase that was coming in the petrol prices on Friday, they helped the government with that. Because of that, we were able to maintain the price,” Malik said.
Political Pressure and Targeted Relief
The price adjustments arrive amid intense political friction over soaring living costs and energy taxation. On October 27, Jamaat-i-Islami (JI) chief Hafiz Naeemur Rehman met with Prime Minister Shehbaz Sharif in Islamabad to discuss his party’s demand to provide relief to the public by abolishing the levy.
While the levy remains intact, the two sides agreed to establish a joint committee to weigh the expansion of an ongoing relief scheme, being offered to owners of motorcycles, rickshaws and vehicles of up to 800cc since September 17. The relief scheme is designed to cover roughly 11.8 million beneficiaries, capping monthly benefits at 20 litres for two- and three-wheelers and 30 litres for small car owners.
Rehman had previously warned that his party would launch a march toward Islamabad in mid-November if authorities failed to deliver substantive relief.
Austerity and Daily Pricing Mechanisms
The fuel adjustments are part of a broader package of austerity and conservation measures implemented in response to supply chain disruptions tied to the Middle East conflict. The government mandated that shops, markets, shopping malls, bazaars, departmental stores, grocery stores, general stores and kiryana shops close by 9:00 PM, while marriage halls and marquees face a 10:00 PM curfew. Restaurants, cafes, eateries, food outlets and standalone fruit and vegetable shops are permitted to operate until 11pm, with takeaway and home delivery services exempt.
Additionally, fuel allocations for official government vehicles have been slashed by 50 per cent for a three-month period. Under a pricing shift announced on July 17, Ogra continues to review and set petroleum prices on a daily basis to mirror swift fluctuations in international oil markets, replacing the previous weekly revision system.
