Fuel prices hit new peaks, sending consumers reeling
The government on Tuesday hiked the prices of petroleum products by up to Rs11 per litre for the second half of July 2025 in a regressive step that would exacerbate the economic hardships faced by the common man.
This is the second consecutive increase in the prices of petrol and diesel since the start of the new fiscal year on July 1. On June 30, the government had increased the fuel prices by up to Rs10 for the first fortnight of the current month that ended on Tuesday.
Separately, the Oil and Gas Regulatory Authority (Ogra) announced a reduction in the prices of re-gasified liquefied natural gas (RLNG) for the current month, while the rate of kerosene oil and the light diesel oil also came down slightly.
According to a notification issued by the Finance Division, petrol price went up by Rs5.36 — from Rs266.79 to Rs272.15 per litre, while the high-speed diesel (HSD) rose by Rs11.37 per litre — from Rs272.98 to Rs284.35 for the July 16-31 period.
This latest adjustment in the petrol and HSD prices reflects persistent volatility in the global oil markets. It also shows the government's fiscal constraints in meeting its ambitious revenue targets as it is already charging highest rate of petroleum levy (PL) on the petroleum products to collect revenue.
The government said that it had taken the latest decision on the recommendations of Ogra and the relevant ministries. "The Government has decided to revise the prices of petroleum products for the fortnight starting July 16, based on the recommendations of OGRA & the relevant ministries," it said.
Ogra had recommended the increase in the prices of petroleum products based on Rs78.02 per litre PL on petrol and Rs77.01 on HSD. It had also assumed Inland Freight Equalisation Margin (IFEM) at Rs8.89 per litre on petrol and Rs6.04 on HSD. The exchange rate adjustment was calculated at Rs3 per litre on petrol and Rs2 on HSD.
Diesel is widely used in agriculture and freight transport, and any price increase directly impacts the cost of goods and services. Petrol, meanwhile, fuels motorcycles and cars, and serves as an alternative to compressed natural gas (CNG), especially in Punjab, where CNG stations rely on imported LNG.
The fresh price hike is expected to further widen the gap between stagnant household incomes and the rising cost of living. Analysts have warned that without the fiscal space or targeted subsidies, the brunt of global oil volatility will continue to be passed on to the end users.
The government had the space to rescue the consumers from the current hike in oil prices by slashing the rate of PL, but it did not compromise on revenue collection and, hence, passed on the full impact of the increase in oil prices in the global market to the consumers.
On July 1, the federal government has increased petrol and HSD prices significantly, attributing the hike to global market volatility amid the Iran-Israel war. Petrol was increased by Rs8.36 to Rs266.79 per litre, and HSD by Rs10.39 to Rs272.98, based on Ogra's recommendation.
Pakistan imports petroleum products to meet around 85% of its local consumption, whereas 15% needs are met through locally-produced crude oil. At present, consumers are already paying over Rs77 per litre in PL. The current year's budget also includes a new carbon levy, further pushing the fuel prices.
Meanwhile, in the deregulated market, kerosene oil becomes cheaper by Rs3.10 and the price of the LDO came down by Rs1.85, while Ogra, through a notification, announced a reduction in the RLNG prices for the current month on the back of slight decrease in the delivered ex-ship (DES) price.
According to the Ogra notification, the RLNG prices for the Sui Northern Gas Pipelines Limited (SNGPL) and the Sui Southern Gas Company (SSGC) had undergone changes in both transmission and distribution segments.
For the SNGPL, the new transmission price has been set at $10.8338 per million British thermal units (mmBtu), down from $11.0154, reflecting decrease of $0.1816, or 1.65%. The distribution price has been revised to $11.5787 per mmBtu from $11.7816, marking decrease of $0.2029, or 1.72%.
Similarly, the SSGC's transmission price has been decreased from $9.7284 per mmBtu in June to $9.4713 in July, a decline of 2.64%. However, the distribution price has also gone down from $10.8650 per mmBtu to $10.5737, a reduction of $0.2913, or 2.68%.
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