Islamabad, July 1, 2025 – In a move likely to spark inflationary concerns, the Government of Pakistan has announced a sharp increase in the prices of petrol and diesel, effective from midnight, July 1, 2025.
According to a formal notification issued by the Finance Division, the hike in fuel prices comes in line with the fortnightly review mechanism and recommendations submitted by the Oil and Gas Regulatory Authority (OGRA), in consultation with other relevant ministries.
As per the revised rates, the price of high-speed diesel has been increased by Rs10.39 per liter, bringing the new rate to Rs272.98, up from the previous Rs262.59. Meanwhile, the price of petrol has been raised by Rs8.36 per liter, now set at Rs266.79, compared to the earlier rate of Rs258.43.
This latest adjustment marks the third consecutive rise in petrol and diesel prices in recent months, further straining household budgets and industrial input costs. The surge in petrol and diesel rates is expected to have a cascading effect on transportation fares, food prices, and manufacturing costs, potentially pushing inflation higher.
Interestingly, the price hike comes at a time when global crude oil markets have shown a downward trend. Following a ceasefire agreement between Iran and Israel, international oil prices had dropped considerably. This development had led many economic observers to predict a possible relief in domestic fuel prices. However, contrary to expectations, the government opted for a steep upward revision.
Experts believe that the government may be attempting to shore up revenue amid fiscal challenges, despite the easing of global oil rates. They argue that instead of providing relief, this increase in diesel and petrol prices will burden the common citizen and hurt small businesses already grappling with inflation.
The Finance Division, however, maintained that the current pricing structure is necessary to align with ongoing commitments under economic stabilization policies.
With petrol and diesel being essential to nearly every sector of the economy, today’s announcement is poised to ripple across the country’s financial landscape.
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