Prime Minister Shehbaz Sharif on Friday announced a significant reduction in fuel prices, cutting diesel by Rs-135 per litre and petrol by about Rs-12 per litre for the week ending April 17. The move reflects a decline in global oil prices following a two-week ceasefire between the United States and Iran.
The new ex-depot price of high-speed diesel (HSD) has been set at Rs385.54 per litre, down from Rs-520.35 a drop of Rs-135, or roughly 26 percent. Diesel is widely regarded as a key driver of inflation because of its extensive use in transportation and freight. Meanwhile, petrol prices have been reduced by approximately 3 percent, falling from Rs378.41 to Rs-366.58 per litre, a decrease of Rs-11.83.
Other petroleum products also saw price cuts. Kerosene oil dropped by Rs-17.33 to Rs-450.15 per litre, while light diesel oil (LDO) decreased by Rs-25.31 to Rs-369.72 per litre. Officials indicated that the sharp fall in diesel prices was not solely due to global market trends but also the result of adjustments in the pricing formula. Previously, local refineries had been benefiting from a widened gap between domestic and imported fuel prices during the conflict period.
Sources noted that over 70 percent of diesel is produced locally, but its pricing had been linked to Middle Eastern benchmarks, allowing refineries to earn higher margins. Correcting this mechanism contributed to a steeper decline in diesel prices compared to petrol.
Despite these reductions, tax rates on petroleum products remain unchanged. The government continues to collect around Rs-39 per litre on diesel, including customs duty and climate-related levies. Petrol carries a much higher total tax burden of about Rs-107 per litre, which includes petroleum levy, customs duty, and climate charges. Similarly, kerosene and LDO are subject to petroleum levies of around Rs-21 and Rs16 per litre, respectively.
In a separate update, Deputy Prime Minister and Foreign Minister Ishaq Dar confirmed the revised prices through an official notification shared on social media.
In a televised address ahead of upcoming US-Iran talks, the prime minister revealed that he had been advised to retain part of the price reduction to recover approximately Rs-129 billion spent on fuel subsidies in the past month. However, he declined the suggestion, stating that the public had already endured a sharp rise in fuel prices with patience, and it was his responsibility to pass on the full benefit of declining global rates.
He emphasized that lowering diesel prices was particularly crucial for farmers during the ongoing wheat harvest, as high fuel costs could lead to increased production expenses and, ultimately, higher food prices.
The prime minister also reiterated that targeted subsidies for motorcyclists, public transport, and the agricultural sector would continue, even without contributions from provincial governments. He stressed that protecting the public from inflation and ensuring long-term economic relief remain top priorities.
Fuel prices had surged earlier, rising from Rs-266 for petrol and Rs-281 for diesel per litre after the US-Israel strike on Iran on February 28 disrupted global energy markets.
