Petrol and diesel prices set for major reduction as global oil markets ease following US-Iran peace agreement
ISLAMABAD, June 19, 2026: Prime Minister Shehbaz Sharif on Friday announced that the government would significantly reduce petroleum prices from June 20, 2026, following a sharp decline in international oil prices after the restoration of stability in the Middle East.
Addressing the National Assembly, the prime minister said the government had fulfilled its commitment to pass on the benefit of lower global oil prices to consumers.
“We had promised that we would bring the price of petroleum products down and repay each penny to the people,” he told lawmakers.
“Today, after our weekly review, we will announce a significant reduction,” he added while praising members of his economic team for managing the recent energy crisis.
Further Relief After Previous Price Reduction
The announcement comes a week after the federal government reduced the prices of petroleum products for the week ending June 19, 2026.
In the previous review, petrol prices were cut by Rs4 per litre, while high-speed diesel prices were reduced by Rs2 per litre.
The prime minister indicated that the latest reduction would be substantially larger as international oil prices continue to decline.
Government Highlights Relief Measures
Shehbaz Sharif also commended provincial chief ministers for supporting the federal government’s efforts to provide targeted subsidies and economic relief to citizens.
He recalled that when international oil prices surged during the recent Middle East conflict, the federal government allocated approximately Rs128 billion to cushion consumers from the full impact of rising fuel costs.
According to the prime minister, the government’s objective has been to balance economic stability with public relief during a period of unprecedented volatility in global energy markets.
Oil Prices Decline Following Peace Agreement
International oil prices extended their decline on Friday as supply concerns eased after oil tankers resumed movement through the Strait of Hormuz, a critical route for global energy shipments.
The easing of tensions followed a peace agreement between the United States and Iran, which helped restore confidence in global oil markets and improved expectations regarding future energy supplies.
The reopening of the strategic shipping corridor has reduced fears of supply disruptions that previously pushed oil prices sharply higher.
Fuel Prices Rose Sharply During Conflict
The conflict had caused significant volatility in petroleum markets worldwide.
According to official figures, petrol prices in Pakistan stood at Rs258.17 per litre when the conflict began before rising to as high as Rs458.41 per litre. Prices later eased but remained above Rs370 per litre in recent weeks.
Similarly, diesel prices increased from Rs275.70 per litre to a peak of Rs520.35 per litre during the height of the crisis.
The disruption of oil flows through the Strait of Hormuz contributed to a global fuel shortage and accelerated inflationary pressures in many countries, including Pakistan.
Impact on Consumers and Economy
Petrol is primarily used by motorists, motorcycle riders and rickshaw operators, making it a key expense for middle-income and lower-income households.
Meanwhile, high-speed diesel plays a crucial role in Pakistan’s transport and agriculture sectors. It is widely used in trucks, buses, trains, tractors, tube wells and other agricultural machinery.
Economists generally view diesel prices as highly inflationary because transportation costs directly influence the prices of food, agricultural products and other consumer goods.
The anticipated reduction in fuel prices is expected to provide relief to households, businesses and farmers while helping to ease inflationary pressures across the economy.
