Petrol to decline by Rs6.82, diesel by Rs1.68; declining ex-refinery prices allow the government to re-impose a Rs2.50/ltr petroleum levy on both
ISLAMABAD: Petroleum product prices are expected to undergo a mixed revision from August 1, 2025, with petrol (PMG) and high-speed diesel (HSD) likely to become cheaper, while kerosene and light diesel oil (LDO) may see slight increases.
High-speed diesel (HSD), the primary fuel for heavy transport and agriculture machinery, is also anticipated to see a downward revision in prices. The ex-refinery price of HSD may be reduced by Rs3.73 per litre to Rs181.06 from the current Rs184.79, while its ex-depot price is projected to drop to Rs280.62 from Rs284.35, indicating a reduction of 2.0 percent and 1.3 percent, respectively.
However, not all fuels are set to become cheaper. Kerosene oil, which is commonly used in rural areas for cooking and lighting, is expected to register an increase in its price. Its ex-refinery price may rise by Rs3.55 per litre to Rs156.60, up from Rs153.05. The ex-depot price of kerosene is also likely to increase by the same amount, reaching Rs184.88 compared to the current Rs181.33. This reflects a price hike of around 2.3 percent at the refinery level and 2.0 percent at the depot level.
Light diesel oil (LDO), which is used in small engines and certain industrial applications, is similarly projected to become costlier. Its ex-refinery price is expected to rise by Rs2.33 per litre to Rs148.38 from the current Rs146.05, while the ex-depot price is likely to increase to Rs170.09 from Rs167.76, indicating an increase of 1.6 percent and 1.4 percent, respectively.
These calculations are based on several pricing components including the current petroleum levy and customs surcharge, which stand at Rs78.02 per litre for petrol and Rs77.01 per litre for diesel. The Inland Freight Equalization Margin (IFEM) for petrol and diesel currently stands at Rs8.89 and Rs6.04 per litre, respectively. Moreover, there is no exchange rate adjustment factored into the current projections. The international premium on petrol is noted at $6.76 per barrel, while the premium on HSD is recorded at $3.20 per barrel.
It is pertinent to mention that the projected reduction in petrol and diesel prices is expected to bring much-needed relief to millions of consumers across the country, particularly motorists, transporters, and the agriculture sector. A decrease of Rs9.07 per litre in petrol and Rs3.73 per litre in high-speed diesel, if approved, will help ease the financial burden on households already grappling with high inflation. Lower petrol prices would directly benefit private vehicle owners and motorcycle users, while the cut in diesel prices could reduce transportation and freight costs, potentially leading to a broader impact on prices of essential goods and services. This anticipated relief comes at a crucial time when the cost of living continues to rise, and any downward adjustment in fuel prices is likely to be welcomed by the public.
