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Pakistan Cuts Petrol by Rs1.49, Diesel by Rs2.73 Per Litre in Second Straight Reduction
Pakistan’s government reduced fuel prices for the second consecutive day on Tuesday, cutting petrol by Rs1.49 per litre and high-speed diesel by Rs2.73, giving consumers a modest break after weeks of steep increases tied to global oil market volatility.
According to a notification issued by the Petroleum Division, the new price of petrol has been fixed at Rs387.54 per litre, while high-speed diesel, commonly known as HSD, will cost Rs402.24 per litre. Both rates take effect for September 30 only, under a daily price-review system Pakistan adopted earlier this year. The Oil and Gas Regulatory Authority determines the actual figures under the country’s petroleum pricing mechanism, with the Petroleum Division responsible for issuing the formal notification once OGRA’s calculations are finalized.
Tuesday’s cut follows an even larger reduction announced a day earlier, when petrol fell by Rs2.27 per litre to Rs389.03 and HSD dropped by Rs3.56 to Rs404.97. Taken together, the two consecutive cuts bring the combined decline to Rs3.76 per litre for petrol and Rs6.29 per litre for diesel over just 48 hours, a meaningful reversal after a month that had otherwise pushed prices sharply higher.
The Petroleum Division attributed the latest adjustment to developments in international markets, specifically changes in Platts benchmark rates, import premiums and other incidental costs that feed into Pakistan’s pricing formula. Under the mechanism now in place, OGRA calculates local rates using a seven-day rolling average of the Platts Arab Gulf price. Over the period behind Tuesday’s revision, the average price of petrol on that benchmark fell to $127.92 a barrel from $128.76, while HSD dropped to $111.76 a barrel from $113.31, changes that translated directly into the lower rupee prices announced for September 30.
Pakistan moved to daily fuel price reviews back in July, replacing the fortnightly revision cycle the country had relied on for years, specifically to let local prices track international oil market swings more closely and quickly. Under the framework approved by the federal cabinet, OGRA now determines and announces ex-depot prices for petrol and HSD every day rather than every two weeks. Imports of high-speed diesel are handled exclusively through state-run Pakistan State Oil, while private oil marketing companies are permitted to import petrol according to their individual market shares.
Even with Tuesday’s relief, taxation remains a significant part of the price consumers pay at the pump. The government continues to collect Rs114 per litre in taxes and duties on petrol and Rs100 per litre on high-speed diesel, meaning a substantial share of the retail price reflects government levies rather than the underlying cost of the fuel itself.
Looking at the month as a whole, Tuesday’s cut is a genuine reversal rather than a continuation of a steady trend. Petrol opened September at just Rs342.79 per litre, before climbing sharply through the month, including a jump of Rs12.90 in a single day on September 8 that pushed the price to Rs358.77. Prices kept rising from there, hitting a September peak of Rs393.75 per litre on September 22, before beginning to ease. Since that peak, prices have moved mostly lower, with a brief uptick of Rs2.02 on September 26 interrupting an otherwise consistent downward run through Tuesday’s Rs387.54 figure.
The broader backdrop behind September’s volatility traces directly to the ongoing conflict involving the US, Israel and Iran, which has driven global oil prices sharply higher for much of this year and squeezed countries like Pakistan that import the bulk of their petroleum needs. Compared to where prices stood before the conflict escalated, the scale of the increase becomes clearer: in the first week of March, before global prices began climbing in earnest, petrol in Pakistan cost just Rs266 per litre and diesel Rs281, figures that look almost unrecognizable next to today’s rates even after two straight days of cuts.
Facing that pressure, Pakistani authorities have reintroduced austerity measures reminiscent of past energy crises, including requiring markets to close by 9pm and cutting fuel quotas for official government vehicles by 50 percent for a three-month period, part of a broader effort to manage demand while international prices remain elevated. Separately, the government has floated a relief program aimed at helping smaller vehicle owners absorb some of the cost, with an estimated 11.8 million beneficiaries under consideration, including roughly 10 million two-wheeler users and 800,000 three-wheeler users who would receive subsidized relief on 20 litres of fuel a month, worth up to Rs2,000 monthly, alongside about a million owners of cars up to 800cc receiving relief on 30 litres a month, worth up to Rs3,000.
For now, Tuesday’s cut offers a small measure of relief to Pakistani consumers after a difficult month at the pump, though with daily reviews now the norm and global oil markets still reacting to every twist in the US-Iran standoff, whether this downward trend holds into October remains far from certain.
