Pakistan’s Ministry of Energy (Petroleum Division) reduced the retail price of motor spirit (petrol/RON-92) by Rs1.97 per litre to Rs297.53, effective July 4, following a recommendation by the Oil and Gas Regulatory Authority (Daily Pakistan; Mashriq TV). High-speed diesel (HSD) was reduced by the same margin to Rs309.50 per litre. The next scheduled review is July 10 under the government’s weekly fuel pricing framework.
The cut reverses a small portion of the price increases that accumulated through the spring and early summer, when petroleum development levy rates were elevated and import costs tracked higher Brent crude prices during the Iran-Israel-US conflict period. Pakistan imports the bulk of its refined petroleum products and is therefore highly sensitive to both international crude benchmarks and the USD/PKR exchange rate, both of which affect the landed cost of fuel.
The Rs1.97 reduction is modest in rupee terms but follows a trajectory of gradual easing after the June 18 ceasefire framework between the US and Iran reduced the geopolitical risk premium embedded in oil prices. Pakistan’s FY26 petroleum development levy collections exceeded their annual target — Rs1.564 trillion against a Rs1.468 trillion goal — reflecting the high levy rates maintained through the year. The government has not signalled any intention to reduce the PDL rate, which at Rs120 per litre on petrol remains near a historical high and accounts for a substantial share of the retail price consumers pay at the pump.
The July 10 review will incorporate updated crude price data and exchange rate movements and may result in a further cut or a hold, depending on market conditions in the intervening week.
