Massive hike in prices of petrol, HSD announced

ISLAMABAD: The federal government hiked petrol by 43 percent and diesel by 55 percent, marking a record increase; however, a temporary three-month subsidy remains in place to safeguard lower and middle-income group.

Speaking at a press conference alongside Finance Minister Muhammad Aurangzeb, Petroleum Minister Ali Pervaiz Malik announced on Thursday Rs 137.23 per litre increase in petrol price and Rs 184.49 per litre in High Speed Diesel (HSD) price following surge in global oil prices due to US-Israel war in Iran.

He said the new price of petrol has been fixed at Rs 458.40 per litre and HSD at Rs 520.35 per litre. The government had already absorbed Rs 129 billion price impact of global oil prices since March 1, 2026.

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The decision has been taken in consultant with government allied parties and chief ministers of four provinces.

“We are thankful to President, government allied parties and chief minister who assured full support in current fuel crises,” he added.

Aurangzeb unveiled a package of targeted subsidies and energy conservation measures, signalling a decisive shift away from blanket relief toward more focused support for vulnerable segments.

Finance minister announced that the government would provide a Rs100 per litre subsidy on petrol for motorcycle users for a period of three months, with a monthly cap of 20 litres per consumer to ensure equitable distribution and prevent misuse.

In a major relief measure for the agriculture sector, Aurangzeb said that small farmers would receive Rs1,500 per acre to support harvesting costs, acknowledging rising input prices and financial pressures on rural communities.

The transport sector also received targeted support.

Separately, a subsidy of Rs100 per litre on diesel will be given to intercity public transport, he added

The government will extend Rs100 per litre subsidy for intercity cargo transport.

The finance minister further said that a subsidy of Rs70,000 per month on fuel will be given to trucks and goods transport.

Further Rs8,0000 for larger cargo vehicles, while passenger vans will receive Rs100,000 per month for an initial one-month period. He added that these incentives would be reviewed next month to assess their effectiveness and fiscal sustainability.

Additionally, the minister confirmed that Pakistan Railways would also be provided a subsidy to maintain affordable fares and ensure continued operations amid rising fuel costs.

Highlighting a broader policy shift, Aurangzeb emphasized that the government is transitioning from blanket subsidies to a targeted subsidy regime, ensuring that financial support reaches only those who genuinely need it while reducing the overall fiscal burden.

On energy conservation, he announced that market operating hours would be reviewed starting next week, as part of a nationwide effort to reduce electricity consumption and promote efficient energy use.

The finance minister reiterated the government’s commitment to economic stability, fiscal discipline, and social protection, noting that these measures are part of a calibrated strategy to balance public relief with macroeconomic sustainability.

Aurangzeb said that the key decision about a hike in fuel prices was made after consultation with the country’s leadership.

He added that a final decision about the market timings would be made after consultations with provincial governments.

Meanwhile, keeping in view the budgeted target of petroleum levy (PL) on petroleum products, federal government increased the PL rate on petrol by Rs 55.24 per litre, whereas reduced to zero on high speed diesel (HSD) with effect from April 3, 2026.

Petroleum levy on petrol has increased to Rs 160.61 per litre on petrol and no PL on HSD. The PL on petrol was earlier Rs 105.37 per litre. The PL on kerosene oil is Rs 20.36 per litre and Rs 15.84 per litre on LDO.

In a statement, petroleum division states Rs 137.23 per litre increase in petrol price and Rs 184.49 per litre in HSD whereas price of kerosene oil has increased by Rs 34.08 per litre and light diesel oil (LDO) on Rs 29.41 per litre.

New price of petrol is fixed at Rs 458.41 per litre and HSD at 520.35 per litre. Whereas, the kerosene oil price is fixed at Rs 467.48 per litre and LDO rate is fixed at Rs 395.03 per litre.

The prices are based at FOB plats average on petrol at USD130.113 per bbl (92 RON) and USD238.677 per bbl on HSD.

Pakistan State Oil paid premium on petrol at USD9.892 per bbl and USD23.154 per bbl on HSD. Ex refinery price of petrol is Rs271.27 petrol and Rs496.97 per litre on HSD. Around 80 percent oil is imported from Oman and Dubai to meet the domestic fuel consumption.

Copyright Business Recorder, 2026