ISLAMABAD: Pakistan government has announced an unprecedented increase in fuel prices. Petrol prices have been raised by Rs137 per litre, a staggering 43% jump, bringing the new rate to a historic high of Rs458.4 per litre. High-speed diesel has surged even more sharply, climbing 55% to Rs520.35 per litre, while kerosene and light diesel oil rose to Rs468 and Rs395 per litre, respectively.
The move marks the second major fuel price revision in under a month, pushing the cumulative increase in petrol to 63% and high-speed diesel to 75% within thirty days.
A key driver behind the hike is the government’s failure to secure greater subsidy allowances from the International Monetary Fund, which capped fuel subsidies at Rs152 billion. Simultaneously, the closure of the Strait of Hormuz by Iran in retaliation for US and Israeli strikes has sent international oil prices soaring, severely limiting Islamabad’s room to manoeuvre.
To offset diesel costs, the government has raised the petroleum levy on petrol to a record Rs161 per litre, effectively transferring the burden onto petrol consumers to cross-subsidise diesel users, a decision that has drawn sharp criticism. As a partial relief measure, motorcycle riders will receive a subsidy of Rs100 per litre.
The government has announced subsidies for farmers, transporters, and low-income citizens. Small farmers will receive a one-time payment of Rs 1,500 per acre. Truck operators carrying food items will receive Rs 70,000 per month, large transport vehicles will receive Rs 80,000 per month, and inter-city passenger vehicles will receive Rs 100,000 per month.
A Rs100-per-litre fuel subsidy will also apply to inter-city and goods transport, with prices reviewed monthly. Low-income train passengers will also benefit from federal support.
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