ISLAMABAD – The federal government has once again raised the prices of petroleum products, triggering fresh concerns among citizens and industry stakeholders already grappling with inflation. Petrol and high-speed diesel (HSD) rates have soared to new peaks in the latest fortnightly review, effective from July 16, 2025.
According to the notification issued by the Finance Division, the price of petrol has been increased by Rs5.36 per litre, bringing the new rate to Rs272.15 per litre. Meanwhile, the price of high-speed diesel has jumped by Rs11.37 per litre, now costing Rs284.35 per litre. These are the highest-ever rates for both fuel types in Pakistan’s history.
This is the second consecutive fuel price hike this month. Earlier, on July 1, the government had raised petrol by Rs8.36 and diesel by Rs10.39, citing fluctuations in the international oil market and exchange rate volatility.
The Oil and Gas Regulatory Authority (OGRA) attributed the recent increase to multiple factors, including a rise in global oil prices due to geopolitical tensions, particularly in the Middle East, and adjustments in the rupee-to-dollar exchange rate. An exchange rate adjustment of Rs3 per litre for petrol and Rs2 per litre for diesel was applied in the latest pricing formula.
Additionally, the government continues to impose full petroleum levies, charging Rs78 per litre on petrol and Rs77 per litre on diesel, along with sales tax. These levies are crucial for meeting revenue targets set under the current arrangement with the International Monetary Fund (IMF).
The price hike is expected to have a significant knock-on effect on inflation, as diesel is the primary fuel for transport and agriculture. The increased cost of transportation will likely drive up prices of essential goods and services, adding further pressure on the general public.
Economists have warned that rising fuel prices will further squeeze household budgets, especially for lower- and middle-income families, who are already bearing the brunt of rising utility bills and food inflation. Public transport fares and commodity prices are also expected to rise as a result.
In contrast, there has been a slight reduction in the prices of some other petroleum products. The prices of kerosene oil and light diesel oil have been revised downward marginally. Additionally, the cost of regasified liquefied natural gas (RLNG) has seen a small drop for both Sui Northern and Sui Southern gas companies.
Fuel prices in Pakistan are revised every fifteen days based on international oil market trends, rupee-dollar parity, and tax adjustments. Unless global markets stabilize or the government provides relief through reduced levies, further increases in fuel prices remain likely in the upcoming reviews.
The continued upward trajectory of fuel prices has left many consumers reeling, with widespread concern over how much more economic burden the average citizen can bear.
