ISLAMABAD – The federal government has announced a substantial increase in petroleum prices across Pakistan, effective from July 16, 2025.
The decision, revealed late on July 15, has triggered concern among transporters, traders, and households, as the hike in petrol and diesel prices is expected to lead to a domino effect on inflation and the cost of essential goods.
According to the Finance Division, the price of petrol has been raised by Rs5.36 per litre, setting the new ex-depot rate at Rs272.15 per litre, compared to the previous Rs266.79. High-Speed Diesel (HSD), which is heavily used in transport and agriculture sectors, saw an even sharper increase of Rs11.37 per litre, climbing from Rs272.98 to Rs284.35 per litre.
This latest revision in petroleum prices follows a similar hike earlier this month, where petrol jumped by Rs8.36 and HSD by Rs10.39 per litre. The government attributes these persistent increases to upward trends in international crude oil markets, which continue to put pressure on domestic pricing mechanisms.
In addition to the price hikes, the Inland Freight Equalization Margin (IFEM) has also been adjusted. For petrol, the IFEM has been increased from Rs6.96 to Rs8.89 per litre, while HSD’s margin has risen from Rs2.09 to Rs6.04 per litre. These adjustments further contribute to the rise in final petroleum prices being passed on to consumers.
However, the petroleum levy remains unchanged. It continues to stand at Rs75.52 per litre on petrol and Rs74.51 on HSD, despite earlier speculation about possible changes.
The new petroleum prices are likely to spark a ripple effect across the economy. Transport fares are expected to go up immediately, followed by a surge in the prices of basic commodities, as fuel is a critical input in the supply chain. With inflation already straining household budgets, the rising petroleum prices are likely to deepen the economic burden on ordinary citizens. Consumers now brace for another fortnight of rising living costs as global and domestic petroleum dynamics unfold.