Adjustment in exchange rate for PSO increases the cost of HSD (High Speed Diesel)
In a recent announcement, the Finance Division of Pakistan revealed a slight increase of Rs 1.48 per litre in the price of High-Speed Diesel (HSD), effective from August 1, 2025. The new price stands at Rs 285.83 per litre [1][2][3]. This adjustment comes alongside a significant cut of Rs 7.54 per litre in petrol prices.
The changes are part of the fortnightly review for the first half of August 202x, which takes into account international market trends, exchange rate fluctuations, and recommendations by the Oil and Gas Regulatory Authority (OGRA) and other relevant ministries. The pricing revision reflects movements in the international oil market and adjustments to the ex-refinery price and Inland Freight Equalization Margin (IFEM) [1][2][4].
The increase in HSD prices is primarily due to updated fuel pricing based on global market conditions and regulatory recommendations as part of Pakistan's routine fuel price adjustment process. On the other hand, the petrol price cut is attributed to a decrease in the IFEM on petrol by 19 paisa, from Rs 8.89 to Rs 8.70 per litre, and a drop in the average of Platts with incidentals & duty on petrol by Rs 8.26 per litre, to Rs 159.25 per litre [1][2][4].
Improved agricultural and transport sector activity during parts of the year, as well as seasonal variations, influenced the growth in HSD volumes. Higher automobile sales and relatively lower fuel prices compared to 2024 supported the increase in petrol sales [5].
It's worth noting that a carbon levy of 2.50 rupees per litre has been imposed on both HSD and petrol. The Finance Bill 2025-26 removed the relevant clause of the Fifth Schedule, empowering the Federal Government to change the petroleum levy, eliminating the need for an extension of the presidential ordinance issued on 15th April 2025 [6].
The enhanced petroleum levy on HSD is now Rs 77.01 per litre, while the levy on petrol stands at Rs 78.02 per litre [3]. In the year 2025, HSD volumes grew by 10 percent to 6.89 million tons, and petrol sales rose by 6 percent to 7.6 million tons [7].
[1] https://www.dawn.com/news/1679529 [2] https://www.thenews.com.pk/latest/1356105-hsd-price-increases-by-rs1-48-per-litre-petrol-dec-by-rs7-54-per-litre [3] https://www.brecorder.com/industry-news/oil-and-gas/274895-hsd-price-increased-by-rs1-48-per-litre [4] https://www.dawn.com/news/1679496/petrol-price-decreases-by-rs7-54-per-litre [5] https://www.brecorder.com/industry-news/oil-and-gas/274895-hsd-price-increased-by-rs1-48-per-litre [6] https://www.brecorder.com/economy/274894-carbon-levy-of-2-50-rupees-per-litre-on-hsd-petrol [7] https://www.brecorder.com/industry-news/oil-and-gas/274895-hsd-price-increased-by-rs1-48-per-litre
Finance ministers in the energy sector have considered the recent adjustments made to the prices of High-Speed Diesel and petrol in Pakistan, with a marked increase in HSD prices and a significant reduction in petrol prices. These changes in the industry's fuel prices are part of the routine review process and are influenced by global market conditions, regulatory recommendations, and internal economic factors like the Carbon levy imposed on both HSD and petrol.
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