Lowering speed limits could help Pakistan save millions of litres of fuel every year

Pakistan’s lower speed limits on motorways and national highways could save about 141 million litres of petrol and diesel a year, according to a new Policy View from the Pakistan Institute of Development Economics (PIDE). At pump prices notified by OGRA on 3 October 2026, that fuel is worth about Rs 56 billion a year. It would also trim the import bill by about USD 134 million.

The policy view titled “Managing Speed Limits: A Government’s Fuel Conservation Measures” by PIDE researchers Irem Batool, Saba Anwar and Amjad Masood calls the measure a quick, low-cost way to cut fuel demand. But it warns that speed limits alone will not close the gap opened by the current oil shock. The National Highways & Motorway Police (NH&MP) lowered the limits as a precaution after conflict involving the United States and Iran disrupted global energy markets. About one-fifth of the world’s oil supply passes through the Strait of Hormuz. Import-dependent economies such as Pakistan are among the most exposed to the resulting volatility in prices.

Transport is by far Pakistan’s largest consumer of petroleum products, which makes it the natural target for conservation. Road transport alone used 14.53 million tonnes of petroleum products in July–June FY2025-26, 96.9 percent of all transport fuel and 1.2 percent more than a year earlier.

The fuel mix is highly concentrated. Petrol (7.8 million tonnes) and high-speed diesel (6.5 million tonnes) make up 95.5 percent of transport use. Petrol mainly powers cars and other light vehicles; diesel moves trucks, buses and freight.

Vehicle numbers are rising much faster than the population. Between FY2011 and FY2023, the population grew by 36 percent while vehicles on the road rose by 243.8 percent, from 10.4 million to 35.9 million. By July–March 2025-26 the fleet had reached 40.8 million. Motorcycles and rickshaws make up 80.5 percent of it, but they are barred from motorways. The study therefore covers light vehicles (6.4 million, including cars, jeeps, taxis, vans and pickups) and heavy vehicles (1.3 million trucks, buses, tankers and tractors).

Under the revised limits, cars and other light vehicles on motorways must now keep to 100 km/h instead of 120 km/h. On national highways their limit falls from 100 to 80 km/h. Buses and heavy vehicles drop from 110 to 90 km/h on motorways and from 80 to 65 km/h on highways.

The physics favours slower driving. Air resistance rises with the square of speed, so each extra 10 km/h burns more fuel than the last. The idea is not new: France cut its limits during the 1973 oil crisis and again urged slower driving during the 2022 energy crisis.

The policy view draws on the International Energy Agency’s March 2026 report Sheltering from Oil Shocks. It finds that cutting highway speed by 10 km/h reduces a car driver’s fuel use by 5 percent to 10 percent. Heavy trucks already travel more slowly and save less per vehicle, about 5 percent, but they cover far more highway kilometers.

Fuel is saved only on kilometers driven on motorways and national highways, only by drivers who were going faster than the new limit, and only if they comply. The study therefore built the estimate segment by segment, for light and heavy vehicles on each type of road.

The policy view measured network fuel use in two independent ways. The first builds up from traffic counts on 12 corridors, covering 14,908 km, and gives 110 million liters of savings a year. The second works down from national fuel sales and gives 172 million liters. The central estimate of 141 million liters is the simple average, since there is no basis for preferring one method. The central case assumes that 70 percent of car kilometers driven on motorways were above the new limit, that those drivers will slow down by 15 km/h on average, and that 70 percent will comply. Heavy vehicles, which already travel more slowly, are assumed to change less.

Of the central savings, about 90 million litres is petrol and 51 million liters are diesel. Depending on how far drivers actually slow down, the savings range from 28 million to 332 million litres a year, worth Rs 10.9 billion to Rs 131 billion.

Cars on motorways save the most per kilometer because they are driving fastest. Heavy vehicles on highways contribute a similar total because they burn so much diesel on the network. Enforcement is decisive. If only 30 percent of speeding drivers slow down, the saving falls to about 65 million liters. With full compliance, it rises to about 218 million litres.

Even so, the gain is modest. The central saving equals about 0.8 percent of annual road petrol and diesel use and about 0.9 percent of the FY2024-25 petroleum import bill of USD 15.0 billion, which runs at about USD 1.25 billion a month. Its direct effect on the current account, the exchange rate and inflation will therefore be small.

The authors stress that the figures are indicative scenario estimates, not forecasts. The low and high values are alternative scenarios rather than statistical confidence bounds. The IEA coefficient is also scaled in proportion to the assumed speed cut, which the study describes as an approximation. The Rs 56 billion is a reduction in fuel spending by households and firms, not a net economic gain. Retail prices include the petroleum levy, climate support levy and dealer and marketing margins, so lower sales also mean lower government revenue. Enforcement costs and the value of extra travel time are not deducted.

The import saving assumes that every litre not burned is a litre not imported. It is valued at OGRA’s landed cost at Karachi Port: Rs 255.30 a litre for petrol and Rs 276.36 for diesel. The estimates also leave out provincial roads and city traffic, where most petrol is used, while road-safety gains and lower emissions are not valued.

To make the limits stick, the study recommends speed cameras and average-speed (section) controls on the busiest corridors, especially the M-2, M-9 and N-5, where most of the fuel is burnt. It also urges NH&MP to publish speed-camera and enforcement data so that the estimates can be updated with observed driver behaviour.

The authors say speed management should be one part of a wider national conservation strategy. It should sit alongside eco-driving for freight operators, remote working, and better public transport, which together could have a far larger effect. “Speed management is a low-cost measure that can be introduced immediately,” the Policy View concludes. It is a useful contribution during an oil supply shock, but it will not by itself ease Pakistan’s external pressures in a major way.

Copyright Business Recorder, 2026