Diesel price falls sharply as petrol becomes costlier under Pakistan’s new daily fuel pricing mechanism.
ISLAMABAD: The government has sharply reduced the price of high-speed diesel (HSD) by Rs32.63 per litre, while increasing the price of petrol by Rs2.97 per litre under Pakistan’s new daily petroleum pricing mechanism.
According to the latest petroleum price notification, the revised rates took effect on August 20, 2026.
The price of petrol has increased from Rs334.54 to Rs337.51 per litre, while the price of HSD has been reduced from Rs395.69 to Rs363.06 per litre.
Petrol becomes more expensive, diesel cheaper
The revised petroleum prices are:
• Petrol: Rs337.51 per litre, up Rs2.97
• High-speed diesel: Rs363.06 per litre, down Rs32.63
The government has also increased the petroleum levy on HSD by Rs1.72 per litre, taking it to Rs80 per litre. The levy on petrol has remained unchanged at Rs80 per litre.
The petroleum levy on kerosene oil has also been retained at Rs20.36 per litre.
The sharp reduction in the HSD price is expected to provide relief to transport operators and other diesel-dependent sectors, while the petrol increase will raise fuel costs for motorists and businesses using petrol-powered vehicles.
Daily petroleum pricing mechanism introduced
The latest revision comes under the government’s new daily petroleum pricing mechanism, through which the Oil and Gas Regulatory Authority (OGRA) has started publishing daily petroleum prices on its website.
The mechanism is aimed at improving transparency and allowing changes in international oil prices to be reflected more quickly in domestic fuel prices.
Petroleum Minister Ali Pervaiz Malik said the daily pricing system is based on a seven-day average of international petroleum prices, in line with international practices.
Under the new framework, OGRA has been authorised to announce daily ex-depot prices for petrol and HSD without seeking prior approval from the prime minister or federal government.
However, prices notified on Fridays will remain unchanged on Saturday and Sunday.
Middle East tensions drive fuel price volatility
The move towards more frequent price adjustments comes amid heightened volatility in international oil markets following renewed tensions in the Middle East.
The government had initially introduced a weekly fuel price review mechanism as the regional conflict intensified, disrupting energy flows and raising concerns over supplies through the Strait of Hormuz.
Under the latest daily mechanism, OGRA will calculate domestic fuel prices using average international market prices recorded during the preceding seven days.
The regulator has also been directed to publish daily Platts reference prices.
Petroleum levy remains capped
Under the new framework, the petroleum levy cannot exceed the limit approved by the federal cabinet.
Any change in the levy rate requires approval from the Finance Division.
For the latest revision, the HSD levy has been increased to Rs80 per litre, while the petrol levy remains at Rs80 per litre.
Government revises fuel import arrangements
The government has also revised petroleum import arrangements for FY2026-27.
Under the new framework, HSD imports will be routed exclusively through Pakistan State Oil (PSO), while oil marketing companies will be allowed to import petrol according to their respective market shares.
Companies failing to meet their import or upliftment obligations may be denied fresh import permissions for up to nine months.
The framework also provides for daily pricing of kerosene oil and light diesel oil, with the relevant authorities directed to implement the mechanism immediately.
The latest adjustment marks a significant divergence in domestic fuel prices, with the government delivering substantial relief to diesel consumers while passing a higher petrol cost on to motorists amid continuing volatility in international energy markets.