Pakistan poised for significant fuel price cut

June 16, 2026 (MLN): Pakistan is set to slash retail fuel prices in its upcoming fortnightly review, with estimates pointing to reductions of up to Rs20 per litre on petrol and as much as Rs35 per litre on high-speed diesel, driven by a steep decline in international petroleum product prices.

Pricing data compiled as of June 15 showed the derived ex-refinery cost of petrol falling to Rs224.99 per litre from Rs245.16 recorded a week earlier, said a press release issued.

The decline was more pronounced for diesel, with ex-refinery costs tumbling to Rs268.96 per litre from Rs304.11, a week-on-week drop exceeding Rs35 per litre.

The softening in domestic cost benchmarks mirrors a broader retreat in global refined product markets.

International petrol prices shed nearly $10 per barrel to settle around $117, while diesel shed roughly $18 per barrel to trade near $138  having stood at $127 and $156 per barrel, respectively, a week prior.

Despite the correction, fuel remains materially more expensive than pre-conflict levels.

Global petrol prices are still around 27% above the $91 per barrel mark recorded before the Middle East conflict, with diesel trading approximately 49% higher than its earlier $92 per barrel baseline.

Lower customs duties, import premiums, and freight charges have also contributed to an easing in the overall landed cost of fuel.

Authorities are actively weighing how much of the import cost reduction to transfer to end consumers. A final decision on revised retail prices is expected later this week.

The stakes are high.

Petrol feeds private vehicle use while diesel underpins agriculture, freight, and public transport  making fuel prices a key driver of food costs and headline inflation.

The government currently collects a Petroleum Development Levy of Rs106 per litre on petrol and Rs53 per litre on diesel, giving it considerable fiscal flexibility in how it structures any price adjustment.

It is cautioned that while a reduction would offer near-term relief to households and businesses, the reprieve could prove short-lived if geopolitical tensions escalate or supply disruptions resurface in global oil markets.

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