By Staff Reporter
ISLAMABAD: The government rang in 2026 with fuel price cuts, slashing petrol and diesel rates for the next two weeks in a move that tracks softer global crude and delivers modest relief to consumers and transporters battered by high costs.
The Petroleum Division announced the reductions late on Wednesday, effective from midnight, setting the ex-depot price of petrol at Rs253.17 per liter, down Rs10.28 or about 3.9%, from Rs263.45. High-speed diesel fell Rs8.57, a 3.2% drop, to Rs257.08 per liter from Rs265.65.
The revision follows movements in international markets and recommendations from the Oil and Gas Regulatory Authority, the Petroleum Division said in its statement. Coming at the dawn of the new year, the adjustments provide a timely buffer for middle- and lower-middle-class households, where petrol powers daily commutes in cars, motorcycles, rickshaws and small vehicles. Elevated fuel expenses have long strained budgets, amplifying the bite of broader price pressures on essentials.
Diesel’s decline holds wider ripple effects on inflation. It fuels the bulk of heavy transport, trucks, buses and trains, along with agricultural gear like tractors, tube wells and threshers, directly feeding into higher costs for vegetables and other food staples that hit low-income families hardest.
The government keeps drawing substantial revenue from fuels even after the cuts. General sales tax stands at zero on all petroleum products, but a petroleum levy of Rs78 per liter applies to diesel and Rs82 to petrol and high-octane blending components, plus a Rs2.50 per liter climate support levy. Customs duties tack on another Rs16 to Rs17 per liter for both petrol and diesel, regardless of local production or imports. Oil companies and dealers claim about Rs17 per liter in distribution and sales margins.
Petrol and diesel remain prime revenue generators, with monthly sales averaging 700,000 to 800,000 tons — far outpacing kerosene’s 10,000 tons. The treasury collected Rs1.161 trillion from the petroleum levy in fiscal 2025 and anticipates a 27% increase to Rs1.470 trillion this year. The changes build on the prior fortnightly review, which trimmed diesel by Rs14 per liter while leaving petrol unchanged.
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