Islamabad | August 30, 2025 – Consumers may see slight relief at the pumps next month, with petroleum prices expected to fall from September 1, driven by lower international crude oil rates. However, experts caution that the volatile rupee-dollar exchange rate could offset these gains.
According to early estimates from industry officials and the Oil and Gas Regulatory Authority (OGRA), petrol is expected to decrease by Rs0.61 per litre, bringing the price from Rs264.61 down to Rs264.00. High-Speed Diesel (HSD), widely used in transport and agriculture, could see the biggest cut of Rs3.13, to Rs269.86 per litre.
Other fuels are also projected to ease:
- Kerosene: Down Rs1.78 to Rs176.70
- Light Diesel Oil (LDO): Down Rs2.61 to Rs159.55
These reductions are based on ex-depot prices and reflect only modest percentage changes—0.2% for petrol, 1.1% for HSD, 0.9% for kerosene, and 1.6% for LDO.
Why the Prices Are Falling
The adjustment comes as global oil markets softened in August. Brent crude averaged $67–68 per barrel, down nearly 7% month-on-month, while WTI slipped to $63–64. Weak demand from China and expectations of higher supply from OPEC+ and US shale producers weighed on prices.
Import premiums were reported at $6.37 per barrel for petrol and $3.20 for diesel, while refining margins also contributed to the downward trend.
The Currency Factor
The relief may not last if the rupee weakens further. The exchange rate averaged Rs282–284 per US dollar in late August, with daily volatility of up to 1%, according to State Bank of Pakistan data. Since Pakistan imports over 80% of its fuel, even small fluctuations can wipe out projected cuts.
Fixed Levies Limit Relief
Despite global price declines, consumers bear the brunt of fixed government charges:
- Petroleum Levy: Rs60 per litre on petrol and diesel
- Climate Support Levy: Rs2.5 per litre
- Inland Freight Equalisation Margin: Rs8.05 on petrol, Rs6.20 on diesel
These charges restrict how much of the global savings actually reach the public.
Possible Impact
If the cut materialises, economists expect a slight dip in inflation, with CPI running at 4–5% in August. Lower diesel costs could reduce transport and agricultural expenses during the Kharif harvest season, easing food and logistics prices by 0.5–1%.
However, as seen in July when petrol prices rose by Rs8.36 despite falling global oil, exchange rate swings could still reverse the trend.
What’s Next
OGRA will finalise its recommendations later today before sending them to the Finance Ministry. Official prices for September 1–15 are expected to be announced tonight.
