Pakistan may welcome the new year with lower fuel prices, as authorities plan a major cut in petroleum rates from January 1, 2026. Falling international crude oil prices have prompted the government to consider passing relief directly to consumers.
Also Read: Major Drop in Petroleum Prices Expected as New Year Begins
According to official sources, policymakers have prepared a proposal to reduce the prices of major petroleum products for the next 15 days. If the government approves the plan, motorists and businesses could see noticeable savings at fuel stations nationwide.
Petrol and Diesel Prices Expected to Fall
Officials expect petrol prices to drop by as much as Rs10.60 per litre. Such a reduction would mark one of the most significant price cuts in recent months. High-speed diesel, a fuel essential for transport and agriculture, could become cheaper by up to Rs8.59 per litre.
If authorities approve the proposal, petrol prices would decline from Rs263.45 per litre to nearly Rs252.85 per litre. At the same time, high-speed diesel prices would fall from Rs265.65 to around Rs257.06 per litre.
Lower petrol prices would ease pressure on private motorists. Meanwhile, cheaper diesel would benefit transport companies, farmers, and logistics operators. Since diesel powers trucks, buses, and agricultural machinery, any reduction directly affects the cost of goods and services.
Relief Expected for Kerosene and Light Diesel Users
The proposal also includes price cuts for other widely used fuels. Authorities expect kerosene oil prices to fall by Rs8.92 per litre. Light diesel oil prices could decrease by Rs6.62 per litre.
Following approval, kerosene prices would drop from Rs180.54 per litre to approximately Rs171.62 per litre. Many low-income households, especially in rural areas, still rely on kerosene for cooking and heating. A price cut would therefore provide targeted relief to vulnerable communities.
Light diesel oil serves small engines, generators, and some industrial units. Lower prices would reduce operating costs for small businesses and farmers, particularly in off-grid areas.
Global Oil Prices Drive the Proposed Cut
The government linked the expected price reduction to a sharp decline in global crude oil prices. In recent weeks, international markets have recorded lower demand and higher supply levels. These trends have pushed prices downward.
Pakistan imports most of its petroleum products. As a result, international price movements strongly influence domestic fuel rates. When global prices decline, authorities can reduce local prices, provided exchange rates and taxes remain stable.
However, officials continue to monitor other factors. Currency fluctuations, freight charges, and import premiums can all affect final prices at the pump.
How Pakistan Reviews Fuel Prices
Pakistan reviews fuel prices every 15 days. The Oil and Gas Regulatory Authority (OGRA) calculates prices based on global oil trends and local costs. The finance ministry then submits its recommendations to the prime minister, who makes the final decision.
Over the past few years, fuel prices in Pakistan have remained highly volatile. Global supply disruptions, geopolitical tensions, and a weakening currency have often driven prices upward. As a result, consumers closely follow any announcement of potential reductions.
Broader Economic Impact of Lower Fuel Prices
Lower fuel prices could support broader economic stability. Transport costs influence food prices, construction expenses, and industrial output. A reduction in diesel prices, in particular, may help slow inflation.
Economists say sustained lower energy costs can improve household spending power. They can also reduce production costs for businesses, which may encourage economic activity.
Still, analysts warn that global oil markets can change quickly. Any sudden geopolitical crisis or supply disruption could reverse the current downward trend.
Decision Expected Near January 1
Although officials have finalized the proposal, the government has not yet issued final approval. Authorities typically announce new fuel prices just before the start of the pricing period.
If approved, the price cut would offer a positive start to 2026 for millions of Pakistanis. Until then, consumers and businesses will continue to watch closely for the government’s final announcement.
