Pakistan Fuel Price Hike: Diesel and Kerosene Up, Petrol Unchanged

The federal government has once again adjusted fuel prices, with a noticeable increase in High-Speed Diesel (HSD) and kerosene oil, effective September 16, 2025. This move comes as the nation grapples with persistent inflation and economic uncertainty.
The Ministry of Finance announced the new prices late Tuesday, revealing a hike of Rs. 2.78 per litre for HSD, pushing its cost to Rs. 272.77. The price of petrol, however, remains unchanged at Rs. 264.61 per litre, offering a slight reprieve to motorists. Kerosene oil, a vital fuel for many households, saw an even steeper rise of Rs. 3.15 per litre, with its new price set at Rs. 179.96.

This latest price adjustment is expected to intensify inflationary pressures. The increase in HSD prices is particularly concerning as it is the primary fuel for a vast majority of Pakistan’s transportation, agricultural, and industrial sectors. Analysts predict that the higher cost of moving goods will inevitably lead to a rise in the prices of essential commodities, from food to construction materials. This ripple effect could further strain household budgets already stretched thin by the high cost of living.
The government maintains that the fortnightly price revision is a necessary measure to align domestic prices with the volatile international crude oil market and the fluctuating value of the Pakistani Rupee. Sources within the finance ministry indicated that while they tried to absorb some of the international price shocks, the increases in diesel and kerosene were unavoidable.
The government’s heavy reliance on the petroleum levy for revenue also plays a significant role in these pricing decisions. While the general sales tax (GST) on petroleum products is currently zero, the levy remains a crucial tool for the government to manage its fiscal deficit.

The public response to these continuous price hikes has been one of growing frustration. Citizens frequently question why domestic fuel prices seem to only increase, even when global crude oil prices experience a downturn. The government’s explanation of currency depreciation and other levies often falls on deaf ears for a populace struggling to make ends meet. As the economic outlook remains challenging, the latest fuel price adjustments will undoubtedly add another layer of pressure on the common person.