By Staff Reporter
ISLAMABAD: Pakistan cut petrol and diesel prices for a fifth consecutive time, passing on part of a slide in global crude that followed the US midterm elections and revived hopes for an end to the Iran war.
The Oil and Gas Regulatory Authority lowered petrol by 6.59 rupees a liter to 346 rupees, and high-speed diesel by 4.25 rupees to 378 rupees. The prices apply from Saturday through Nov. 10, with a public holiday falling on Nov. 9. Petrol has fallen 31.91 rupees a liter over the recent run of revisions, from 377.91 rupees, while a cut of 9.41 rupees for petrol and 5.56 rupees for diesel had already taken effect on Friday. The government still collects 114 rupees a liter in taxes and duties on petrol and 100 rupees on diesel.
The latest reductions lean on an arrangement announced Monday under which oil refineries will bear a combined 15 billion rupees over 30 days, according to the government. Petroleum Minister Ali Pervaiz Malik said the cost would be absorbed by local refiners, allowing petrol to be sold about 15 rupees a liter below the international price. That makes room for a 14.71 rupee cut in the petrol levy. Malik said the government would keep its economic constraints and commitments to the International Monetary Fund in view while protecting consumers.
Pump prices remain far below their spring highs but well above where they stood before the war. Diesel peaked at 520.35 rupees on April 3, up from 281 rupees before the US-Iran conflict began on Feb. 28. Petrol reached 458.41 rupees on the same day, having started its climb from about 266 rupees in the first week of March. The government moved from weekly to daily price reviews on July 17 after hostilities between Iran and the US resumed, and petrol topped 380 rupees in mid-September after six straight daily increases. OGRA now publishes daily prices on its website.
The government has also reintroduced austerity measures. Markets must close by 9 p.m., and fuel allocations for official vehicles have been cut by 50% for three months. On Sept. 13, Prime Minister Shehbaz Sharif announced a relief scheme for users of motorcycles, autos and vehicles up to 800cc. Petrol is used mainly in private cars, rickshaws and two-wheelers, so price changes hit the middle and lower-middle classes. Diesel feeds heavy transport, power plants and large generators. The two fuels are the main revenue earners, with monthly sales of about 700,000 to 800,000 tons, against about 10,000 tons for kerosene.
The domestic cuts follow a sharp drop in crude. Brent futures settled at $98.32 a barrel on Friday and West Texas Intermediate at $90.83. Brent was on course for a weekly loss of about 16%, its steepest percentage decline since the pandemic began in 2020. Brent traded between $106.65 on Monday and $93.40 on Wednesday, and the gap between the two benchmarks has narrowed to about $7.50. Democrats won control of both chambers of Congress on Tuesday, and Trump acknowledged the Iran war played a role in his party’s defeat. Voters had voiced frustration over high inflation and soaring gasoline prices tied to the war. A sell-off in technology stocks also weighed on crude. The S&P 500 fell 4.4% on Thursday, its worst day since April 2025, with the Dow down 1,833 points and the Nasdaq Composite off 5.5%.
Few of the risks behind the war premium have gone away. US officials said they carried out “defensive” strikes on Iran’s Qeshm Island on Monday, targeting surface-to-air missiles. Trump told the Financial Times the US had no immediate plans to strike Iran, and Qatar stepped up mediation. Iran reportedly sent a nuclear proposal to Washington through Qatar, according to Reuters. A senior Iranian official also told Reuters that the two sides remain far from a deal. The Revolutionary Guard claimed on Friday that two more tankers struck mines in the Strait of Hormuz, a claim not independently confirmed. Bob McNally, founder of Rapidan Energy Group, put the odds of fighting resuming at 80%, in which case he said both benchmarks could rise above $100. Yemen’s Houthis, meanwhile, continue to threaten Saudi Arabia’s Red Sea export routes.
Supply data pull both ways. JPMorgan Chase & Co. estimates a global crude surplus of about 1.1 million barrels a day, reflecting looser shipments and weaker demand, though flows of refined products remain constrained by damage to refineries upstream of Hormuz. Ukraine hit six Russian refineries this week, and Russia maintains its ban on diesel exports except for volumes already promised to the US, according to market commentary. The US Energy Information Administration reported a 900,000-barrel drop in commercial crude inventories last week, while the Strategic Petroleum Reserve held at 283 million barrels, the lowest since 1982. China and South Korea have begun refilling reserves after drawdowns over the past eight months, which analysts say could put a floor under prices, with an estimated 1 billion barrels drained during the war. US employers added 165,000 jobs in October, well above the 65,000 forecast, and unemployment slipped to 4.1%.
Analysts say a full unwinding of the risk premium would need a halt to fighting and serious peace talks. Until then, Pakistan’s fuel prices will track a market that has priced in a deal not yet signed. The current rates run through Tuesday.
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