Diesel Price Climbs Rs2.78 While Petrol Remains Steady

ISLAMABAD – In its latest fortnightly review, the government has raised the price of high-speed diesel (HSD) by Rs2.78 per litre, while keeping petrol prices unchanged until the end of September. The adjustment comes in line with global oil market trends and recommendations from the Oil and Gas Regulatory Authority (OGRA).

According to the Ministry of Finance, the revised ex-depot rate of HSD now stands at Rs272.77 per litre, up from Rs269.99. Meanwhile, the price of petrol has been maintained at Rs264.61 per litre, offering some relief to consumers despite global price volatility.

Diesel Rate Adjustment Sparks Economic Concerns

Diesel, a key fuel for both transportation and agriculture, plays a central role in determining the overall cost of goods and services in the country. Analysts warn that the increase could push up logistics and farming expenses, potentially adding pressure to inflation.

Government revenue collection on petroleum products remains substantial. While general sales tax (GST) is set at zero, significant levies continue to be applied. Currently, about Rs98 per litre is charged on both petrol and diesel, including Rs79.50 on diesel and Rs80.52 on petrol as petroleum and climate levies, with Rs2.25 earmarked as a climate support levy.

Custom duties of around Rs16–17 per litre are also in place for both fuels, regardless of whether they are produced locally or imported. Additionally, nearly Rs17 per litre is directed towards distribution and dealer margins, further burdening consumers.

Government Eyes Higher Revenue Through Petroleum Levy

Petrol and diesel remain the biggest contributors to government revenue, with combined sales ranging between 700,000 and 800,000 tonnes monthly. By contrast, kerosene demand stands at a mere 10,000 tonnes per month.

In fiscal year 2025, the government collected Rs1.161 trillion from petroleum levies alone. Officials now expect this figure to climb by nearly 27 percent, reaching Rs1.470 trillion in the ongoing fiscal year.

While the unchanged petrol price may bring temporary stability, the diesel hike is likely to ripple through the economy, affecting transport fares and agricultural costs in the weeks ahead. The government will continue to monitor global market conditions and adjust domestic prices in its next review at the end of the month.

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