Islamabad, February 28, 2026: The government of Pakistan late Saturday night announced a significant increase in petroleum prices for the first fortnight of March 2026, citing escalating tensions in the Gulf region and the risk of a surge in international oil prices.
According to a notification issued by the Petroleum Division, the price of petrol has been raised by Rs8 per litre, taking the new rate to Rs266.17 per litre, up from Rs258.17.
Similarly, the price of high-speed diesel (HSD) has been increased by Rs5.16 per litre, bringing it to Rs280.86 per litre, compared to the previous rate of Rs275.70.
Impact on Consumers and Inflation
Petrol is widely used by commuters, especially those relying on small vehicles, motorcycles, and rickshaws. The sharp hike is expected to increase daily commuting costs, placing additional financial pressure on middle- and lower-middle-income households already struggling with rising living expenses.
On the other hand, high-speed diesel is the backbone of Pakistan’s transport and agriculture sectors. It is primarily consumed by buses, trucks, trains, and agricultural machinery, including tractors, tube wells, and threshers. As a result, any increase in diesel prices is considered highly inflationary, as it directly affects transportation and production costs.
Likely Rise in Food and Commodity Prices
Economists warn that higher diesel prices could trigger an increase in food inflation, particularly for vegetables and essential commodities, due to rising freight and logistics costs. The ripple effect of the fuel price hike is likely to be felt across retail markets nationwide in the coming weeks.
Gulf Tensions and Global Oil Prices
Sources in the petroleum ministry attributed the latest price adjustment to uncertainty in global oil markets, driven by growing geopolitical tensions in the Gulf region. Prolonged disputes could lead to supply disruptions and higher international crude prices, increasing Pakistan’s import bill and exerting further pressure on domestic fuel prices.
Outlook
With global energy markets remaining volatile, analysts believe further fluctuations in petroleum prices cannot be ruled out. Consumers and businesses alike are bracing for higher transportation and production costs, which could deepen inflationary pressures across the economy.