By SKM
August 29, 2025
ISLAMABAD: As historic floods continue to wreak havoc across Punjab and pose increasing threats to Sindh, Pakistan is expected to see a slight reduction in petroleum product (POL) prices beginning September 1, offering limited relief to consumers battered by inflation and natural disaster.
According to official estimates, petrol prices are likely to be reduced by Re0.61 per litre, bringing the new price to Rs264.00. High-Speed Diesel (HSD) is expected to drop more significantly by Rs3.13, settling at Rs269.86. Kerosene oil may see a cut of Rs1.57 per litre, while Light Diesel Oil (LDO) is projected to decrease by Rs2.61, bringing it to Rs159.55 per litre.
The reduction comes in response to a modest downturn in global crude oil prices. Brent crude fell from a mid-August peak of $68.18 per barrel to $66.73 by August 27. Though the drop is minimal, it has provided room for a small downward revision in domestic prices.
Tax-Heavy Price Structure
Despite the cut, experts caution that consumers will feel only marginal relief due to the heavy tax burden embedded in fuel pricing. Currently, the government levies Rs80.52 per litre in Petroleum and Carbon Levy on petrol, and Rs79.51 per litre on HSD. In addition, Inland Freight Equalization Margin (IFEM) stands at Rs8.05 for petrol and Rs6.20 for HSD.
Premiums on imported fuels also contribute to the final cost, with importers paying $6.37 per barrel for petrol and $3.20 per barrel for HSD.
Global Trends Suggest Further Declines
Market forecasts from international agencies suggest further downward pressure on oil prices in the months ahead. Goldman Sachs projects Brent crude to average between $60–66 per barrel for the remainder of 2025, possibly slipping into the low $50s in 2026 if global supply surpluses emerge.
Similarly, the U.S. Energy Information Administration (EIA) expects Brent to dip below $60 per barrel in the fourth quarter of 2025 and remain around $50 throughout 2026 due to rising inventories and expanded production.
Relief Amid Ruin
The modest price adjustment comes at a critical time, as floods have devastated infrastructure, displaced thousands, and disrupted supply chains. With inflation already biting into household budgets, the small cut in fuel prices may offer some temporary breathing room, especially for transportation, agriculture, and logistics sectors that rely heavily on diesel.
However, analysts warn that unless the government reconsiders its reliance on fuel taxation, any global relief in oil prices will have a limited trickle-down effect on the average Pakistani consumer. Ends
