Diesel prices in Pakistan are expected to decline sharply by Rs 13.69 per liter starting December 16, 2025, according to estimates by Arif Habib Limited. The reduction follows a significant drop in international oil prices and normalization of domestic price spreads.

Data shows the average international price of gas oil (diesel) fell 7.8% to $81.40 per barrel in the first half of December, down from $88.27 per barrel previously. This decline has prompted analysts to forecast lower high-speed diesel (HSD) rates across the country.

Petrol Prices to Rise Slightly

In contrast, petrol (motor spirit, MS) prices are expected to rise marginally by Rs 1.43 per liter, bringing the average from Rs 263.45 to Rs 264.87. The increase reflects minor adjustments in domestic OMC margins and market factors, despite falling global gasoline prices averaging $75.20 per barrel.

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Market and Fiscal Implications

Analysts note that the government may use the decline in ex-refinery HSD prices to adjust the petroleum levy (PL) on diesel, helping meet FY26 revenue targets. Additionally, margins for oil marketing companies may increase by Rs 0.61 per liter, pending approval from the Economic Coordination Committee (ECC).

The Pakistani rupee remained largely stable during this period, averaging 280.59 against the US dollar, supporting minor fluctuations in fuel pricing.

Consumers can expect noticeable relief on diesel prices, benefiting transport and industrial sectors, while petrol users face a modest increase. The price adjustments underscore the sensitivity of Pakistan’s fuel market to global oil trends and domestic fiscal policies.