The Government of Pakistan is expected to reduce domestic petrol and diesel prices in the upcoming review on Friday, as a sharp decline in international fuel prices has created room for consumer relief, according to industry estimates and pricing data.
Petrol prices can decline by as much as Rs. 20/liter, while high-speed diesel may become cheaper by up to Rs. 35/liter if the government passes on the full impact of lower global prices to consumers.
Data reviewed on June 15 showed the derived ex-refinery cost of petrol falling to Rs. 224.99/liter in the fourth week of June from Rs. 245.16 a week earlier. The ex-refinery cost of diesel dropped even more sharply to Rs. 268.96/liter from Rs. 304.11/liter, reflecting a decline of more than Rs. 35/liter.
The reduction follows a steep fall in international benchmark prices for refined petroleum products. Global petrol prices declined by nearly $10 per barrel to around $117 per barrel from $127 a week earlier, while diesel prices fell by about $18 per barrel to approximately $138 per barrel from $156 per barrel.
Despite the recent decline, fuel prices remain significantly higher than levels seen before the Middle East conflict. Petrol is still about 27% more expensive than its pre-conflict level of $91 per barrel, while diesel remains roughly 49% above its earlier price of $92 per barrel.
Officials familiar with the pricing process said the government is evaluating options to pass on the benefit of lower import costs to consumers. Lower customs duties, import premiums and freight-related charges have also contributed to the decline in overall fuel costs.
Fuel prices remain politically sensitive in Pakistan because of their direct impact on transportation, food prices and broader inflation. Petrol is primarily consumed by private motorists, while diesel is widely used in agriculture, public transport and freight movement.
Pakistan currently imposes a Petroleum Development Levy (PDL) of Rs. 106/liter on petrol and Rs. 53/liter on diesel, providing the government with a significant source of revenue.
The government is expected to announce revised retail fuel prices later this week. Economists say any reduction could provide temporary relief to households and businesses, although renewed geopolitical tensions or supply disruptions could quickly reverse the downward trend in international oil markets.