Diesel Prices Set for a Major Decrease, Petrol Rates to Rise Slightly

Diesel prices in Pakistan are expected to see a significant reduction of Rs. 13.69 per liter from December 16, while petrol prices may rise slightly by Rs. 1.43 per liter, according to estimates by Arif Habib Limited. The anticipated changes follow a sharp decline in international oil prices and a normalization of price spreads. Data compiled by Arif Habib Limited shows that the average international price of gas oil (diesel) dropped by 7.8% to $81.40 per barrel in the first half of December, compared to $88.27 per barrel in the previous period. Meanwhile, the average price of gasoline (petrol) edged down to $75.20 per barrel. The rupee remained largely stable against the US dollar, averaging 280.59 during the same period. The expected reduction in high-speed diesel (HSD) prices is not only a result of lower global oil rates but also reflects normalizing margins in the domestic market. However, analysts note that the government could use the decline in ex-refinery HSD prices to increase the petroleum levy (PL) on diesel, helping to meet fiscal year 2026 revenue targets. Additionally, oil marketing company (OMC) margins may be raised by Rs. 0.61 per liter in the coming fortnight, pending approval from the Economic Coordination Committee (ECC). In contrast, petrol (motor spirit, MS) prices are projected to increase, with the average price per liter expected to rise from Rs. 263.45 to Rs. 264.87.