On Tuesday, the government increased petroleum product prices by up to Rs11 per litre for the second half of July 2025. This is the second consecutive rise in petrol and diesel prices since the start of the fiscal year on July 1. On June 30, the government raised fuel prices by up to Rs 10 for the first fortnight of July.
According to a Finance Division notification, petrol price went up by Rs5.36, from Rs266.79 to Rs272.15 per litre. High-speed diesel (HSD) rose by Rs11.37, from Rs272.98 to Rs284.35 for July 16-31.
The government said, “The Government has decided to revise the prices of petroleum products for the fortnight starting July 16, based on the recommendations of OGRA & the relevant ministries.”
OGRA based its recommendation on Rs78.02 per litre petroleum levy (PL) on petrol and Rs77.01 on HSD. It also included an Inland Freight Equalisation Margin (IFEM) of Rs8.89 per litre on petrol and Rs6.04 on HSD.
Exchange rate adjustments were Rs3 per litre on petrol and Rs2 on HSD. Diesel, widely used in agriculture and freight transport, impacts goods and services. Petrol powers cars and motorcycles, and substitutes CNG in Punjab, where CNG stations depend on imported LNG.
The hike increases the gap between stagnant household incomes and rising living costs. Analysts warn that the lack of fiscal space or targeted subsidies means consumers will keep bearing the burden.
The government could have cut PL rates to give relief, but chose to maintain revenue targets. Consumers currently pay over Rs 77 per litre in PL. The budget also includes a carbon levy, which adds to fuel costs.
Earlier, on July 1, petrol and HSD prices increased significantly due to global volatility linked to the Iran-Israel war. Petrol rose by Rs8.36 to Rs266.79 and HSD by Rs10.39 to Rs272.98. Pakistan imports about 85% of its fuel needs, while only 15% comes from local crude oil.
Meanwhile, kerosene oil became cheaper by Rs3.10, and light diesel oil fell by Rs1.85. OGRA also announced a reduction in RLNG prices for July due to a small drop in delivered ex-ship prices.
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