The prices of petroleum products in Pakistan are expected to rise significantly from July 1, 2025, despite a notable decline in global oil prices, according to a report by News citing official sources.
The price of high-speed diesel (HSD) is expected to increase by Rs14.86 per litre, while petrol may see a rise of Rs11.43 per litre for the upcoming fortnight.
The Oil and Gas Regulatory Authority (OGRA) has prepared a summary of revised petroleum prices and is expected to submit it today. The summary will be reviewed by the Petroleum Division and the Ministry of Finance before it is forwarded to Prime Minister Shehbaz Sharif for final approval.
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In contrast to the domestic increase, international oil prices fell on Monday, as easing geopolitical risks in the Middle East and the possibility of another OPEC+ output hike in August improved global supply expectations.
- Brent crude futures for August fell 12 cents (0.18%) to $67.65 per barrel by 0718 GMT.
- The more active September contract traded at $66.56, down 24 cents.
This decline reflects persistent uncertainty regarding the global demand outlook, but domestic pricing in Pakistan seems to be influenced more by internal fiscal policies and taxes.
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IMF Proposal and Carbon Levy Stir Controversy
The price hike speculation comes after the International Monetary Fund (IMF) reportedly recommended increasing petrol and diesel rates for cash purchases as part of broader fiscal reforms.
Meanwhile, the government has proposed a Rs2.5 carbon levy on petrol in the 2025–26 federal budget. However, this proposal was rejected by the Senate Standing Committee on Finance last Thursday with a majority vote.
PPP Senator Sherry Rehman voiced strong opposition, noting,
“There is no country in the world where a carbon levy has been imposed; carbon tax requires legal legislation, not enforcement via finance bills.”
Senator Mohsin Aziz also criticized the move, citing the Supreme Court’s ruling in the Zafar Iqbal Jhagra case, which had restrained the imposition of such levies.
“Enforcing a carbon levy would be in contempt of court,” he warned.
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With the summary submitted and a controversial levy under debate, the final decision now lies with Prime Minister Shehbaz Sharif, who is expected to approve the revised fuel rates within the next 24 hours.
Despite opposition from the Senate committee and falling international oil prices, the expected hike may put further pressure on inflation and household budgets, especially ahead of the monsoon season and upcoming Eid holidays.
