By SKM
October 14, 2025
ISLAMABAD: In a welcome respite for inflation-hit consumers, petroleum prices in Pakistan are poised for a notable reduction from October 16, following a sharp downturn in global crude oil markets. The decline is linked to cooling geopolitical tensions and rising oil output from key global producers.
According to preliminary estimates, petrol is expected to fall by Rs6.10 per litre, bringing the price down from Rs268.68 to Rs262.58, a 2.3% drop. High-speed diesel (HSD) is likely to see a modest reduction of Re0.97, settling at Rs275.84. Meanwhile, kerosene oil is projected to slide by Rs2.75 to Rs182.22, and light diesel oil (LDO) by Rs1.64 to Rs163.86 per litre.
The price cut reflects a two-week decline in international oil benchmarks, spurred by a de-escalation in Middle East tensions, particularly optimism around a Gaza ceasefire plan, and a surge in supply from OPEC+ producers, including Algeria and Russia. The easing of the so-called “Middle East risk premium” has pulled global crude prices downward, offering fiscal space for domestic adjustments.
Energy officials point to Algeria’s ramped-up production, alongside increased output from Russia, as key contributors to a softening market. This supply-side pressure, coupled with tempered demand expectations, has nudged oil prices off recent highs.
Despite the projected reductions, domestic fuel prices remain elevated due to a heavy tax load. Currently, consumers pay Rs80.52 per litre in petroleum and carbon levies on petrol, and Rs79.51 on HSD. Additionally, the Internal Freight Equalization Margin (IFEM) adds Rs8.69 on petrol and Rs6.19 on diesel, further inflating pump prices.
The Finance Division is expected to finalize and announce the new prices this evening (October 15) after reviewing recommendations from the Oil and Gas Regulatory Authority (OGRA).
If approved, the cuts will mark a modest reprieve for households and businesses grappling with high energy costs. However, analysts caution that tax rigidity continues to limit the full pass-through of global price reductions to the end consumer.
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