Ministers say the move is aimed at improving transparency. Diesel increased by Rs 31.05 per litre, petrol by Rs 5.44.
ISLAMABAD:
The federal government announced on Friday that prices for petroleum products would now be reviewed and reported daily, replacing the weekly pricing mechanism, as renewed tensions between the United States and Iran continue to drive volatility in global oil markets and raise concerns about fuel supply.
Under the new pricing mechanism, the government increased the ex-depot price of high speed diesel (HSD) by Rs 31.05 per liter from Rs 323.30 to Rs 354.35, while the price of petrol was increased by Rs 5.44 per liter from Rs 310.71 to Rs 316.15, with the revised rates coming into effect from July 18, 2026.
Officials said the daily review system would allow domestic fuel prices to reflect changes in international oil markets more quickly while reducing the risk of supply disruptions and speculative hoarding.
The decision comes after the government had already moved from biweekly to weekly reviews of fuel prices following the first phase of the US-Iran conflict.
As tensions escalate again following a fresh exchange of strikes and growing concerns over disruptions to oil supplies through the Strait of Hormuz, authorities have opted for daily price adjustments to ensure uninterrupted availability of fuel and greater transparency in the pricing mechanism.
Addressing a press conference alongside Information Minister Ataullah Tarar, Oil Minister Ali Pervaiz Malik said the decision had been taken at a federal cabinet meeting chaired by Prime Minister Shehbaz Sharif.
Malik said the move was aimed at improving transparency in oil prices without exposing the state to financial risks.
“The federal cabinet and the prime minister decided that, without exposing the state to any risk, Ogra would be given the responsibility of determining oil prices on a daily basis in accordance with international market trends. Ogra will not only publish on its website the Platts reference rates, which are used globally to determine oil prices, but will also reveal the components that make up the final price that consumers pay at the petrol pumps. Ogra has been ordered to publish all these details so that people know why these prices are inevitable,” he said.
Malik said it was unfortunate that despite Pakistan’s leaders making “tremendous efforts” to move the region towards reconciliation and a lasting ceasefire, tensions had once again begun to escalate.
“It is unfortunate that despite the sincere efforts made by our leaders, especially Prime Minister Shehbaz Sharif, Chief of Defense Forces and Chief of Army Staff Field Marshal Asim Munir, to lead the region towards reconciliation and a permanent ceasefire, tensions are rising once again,” he said.
The minister said oil prices, which had already seen sharp fluctuations during previous episodes of regional tensions, were rising once again.
He said diesel prices had increased significantly in recent days, adding that Platts’ benchmark price for diesel had risen from $110 per barrel to $140 per barrel as of Friday.
Referring to oil prices, Malik said the Platts benchmark had risen from around $89 per barrel to nearly $100 per barrel, pushing up energy prices in international markets.
The minister thanked the public for their patience despite the difficulties and said the people had shared the burden along with the government despite a subsidy of Rs 130 billion and a targeted subsidy program implemented in coordination with the provincial governments.
“Today’s decision aims to bring greater transparency to the entire system so that people can understand why increases in oil prices become inevitable,” he said.
Malik added that if the government had adopted the same approach taken by a previous administration in 2022, the public would have continued to pay the price for years through higher inflation.
He acknowledged that the latest decision would be difficult for consumers, but said it was necessary to strengthen the State.
Rejecting the perception that the government had increased the burden on consumers through higher taxes or had failed to pass on the benefit of lower international oil prices, Malik said:
“The government remains committed to its promise. Just as the price of diesel has fallen from Rs 520 per liter to less than Rs 300 per litre, people have also witnessed a substantial reduction of Rs 70 to Rs 80 in petrol prices.”
He added that the fall in international oil prices has been fully transmitted to consumers.
Clarifying the issue of oil tax, Malik said international agreements require Pakistan to maintain such taxes to support the budget.
He said the combined oil tax and carbon support tax remained lower than before the conflict began and that no additional burden had been imposed on the public beyond Pakistan’s international commitments.
The minister said daily oil prices will be determined based on the average Platts benchmark index of the previous seven business days.
“It will be ensured that whenever prices rise, they will rise accordingly, and when they fall, they will automatically fall without the need for approval from Prime Minister Ata sahab or me, and the relief will be conveyed to the public immediately and daily,” he said, describing the move as another step towards deregulation.
Malik also said that the prime minister had ordered the Federal Investigation Agency (FIA), Intelligence Bureau (IB) and all law enforcement agencies to take strict action against anyone involved in speculation in the oil sector.
At the press conference, Information Minister Ataullah Tarar said the new pricing mechanism would ensure that changes in international oil prices would be immediately reflected in domestic fuel prices.
“As oil prices are determined daily, the criticism that changes in international prices are not passed on immediately will no longer stand. Any increase or decrease that occurs will be passed on without delay,” he said, adding that the move would bring greater transparency to the pricing system.
Tarar also dismissed the perception that the government had substantially increased the oil tax.
“There is a misconception that the tax has increased substantially, but it is still lower than before the war. Since there has been no increase in the tax now, the entire mechanism of determining oil prices will be more transparent,” he said.
Tarar highlighted the need to move towards cleaner transportation and said Pakistan would eventually have to adopt electric vehicles.
“If our import bill continues to rise and the public continues to bear the impact of fluctuations in international oil prices, the best solution is for us to gradually move towards electric vehicles and motorcycles,” he said.
Petrol and diesel prices are revised
Under the new daily pricing mechanism, the Ministry of Power (Petroleum Division) has revised in-depot oil prices by July 18, 2026, increasing the prices of petrol and diesel up to Rs 31 per litre, in line with international market trends.
The price of high speed diesel (HSD) increased by Rs 31.05 per liter from Rs 323.30 to Rs 354.35 per liter.
Meanwhile, petrol price increased by Rs 5.44 per liter from Rs 310.71 to Rs 316.15 per liter.
Currently, the government levies a petroleum tax of Rs 70.82 per liter on HSD retail sales and Rs 79.46 per liter on direct sales, along with a carbon support levy (CSL) of Rs 5.
In case of petrol, it charges Rs 80 per liter as petroleum tax and Rs 5 per liter as CSL at the outlets.
The government is also levying a petroleum tax of Rs 105 per liter on HOBC (RON 97) and MS (RON 95), while the tax on premium kerosene and light diesel is Rs 20.36 and Rs 15.84 per litre, respectively, without any carbon support tax.
For furnace oil, the petroleum tax is Rs 77 per liter (Rs 82,077 per metric tonne) for both retail and direct sales, in addition to a carbon support tax of Rs 5 per liter (Rs 5,330 per metric tonne).
The Petroleum Division said the revised prices would remain in force only until July 18, 2026.
Officials said the change to daily prices would also discourage oil distributors allegedly involved in hoarding fuel products in anticipation of price increases.
Last week, under the weekly review mechanism, the government had increased the prices of petrol and diesel by up to Rs 13.80 per litre.
Officials said international oil prices had risen again following renewed conflict between Iran and the United States and concerns about the closure of the Strait of Hormuz, threatening global oil supplies, including those from Pakistan.
Domestic fuel prices had initially declined following the Iran-US peace deal, but began to rise again after fresh hostilities resumed.
The renewed conflict has also raised concerns about possible fuel shortages in the country.
High-speed diesel is widely used in the transportation and agriculture sectors, while gasoline is mainly consumed in motorcycles and cars. Officials said demand for petrol has increased following restrictions on the use of indigenous gas in Punjab.
Kerosene oil continues to be used in remote areas, particularly in the northern regions of the country, where LPG is not available for cooking, while the Pakistan army remains one of its main users. Light diesel is mainly used in industry.
Gas pump owners reject policy
Meanwhile, the Pakistan Petrol Pump Owners Association rejected the government’s policy of deregulating oil prices, warning it would consider launching protests and a national strike next week if the decision was not withdrawn.
In a video statement, association president Nauman Ali Butt urged the government to review the policy, saying petrol pump owners should not bear the burden of the new system.
He demanded that all stakeholders be trusted before oil marketing companies (OMCs) finalize fuel prices under the proposed mechanism.
Butt said nearly 15,000 petrol pump owners across the country had expressed serious reservations about the policy.
He warned that the new mechanism would affect oil tankers, transportation and the general fuel pricing system.
The association president also asked the government to consult petrol pump owners instead of taking unilateral decisions.
