Islamabad: The federal government of Pakistan has announced a sharp increase in petroleum prices, hiking the rate of petrol by Rs 12.90 per litre and high speed diesel (HSD) by Rs 3.72 per litre. According to a notification issued by the Ministry of Energy's Petroleum Division on Monday, the revised rates take effect from Tuesday, September 8, 2026, pushing the price of motor spirit (petrol) from Rs345.87 to Rs358.77 per litre, while HSD rises from Rs378.05 to Rs381.77 per litre.
The federal government continues to retain significant taxation on petroleum products, levying Rs114 per litre in total taxes and duties on petrol and Rs100 per litre on diesel. The latest price revision was determined under the cabinet approved daily petroleum pricing mechanism managed by the Oil and Gas Regulatory Authority (OGRA). Introduced earlier in the year to replace fortnightly and weekly reviews, the system calculates daily ex depot fuel prices using a seven day rolling average of international Platts reference prices.
Under this framework, OGRA is authorised to notify adjusted rates directly without requiring prior cabinet or prime ministerial approval, allowing domestic prices to respond immediately to fluctuations in global energy markets. The upward adjustment reflects ongoing volatility across international crude markets, driven by geopolitical friction in the Middle East and concerns over supply flows through critical trade routes such as the Strait of Hormuz.
Despite the recent increase, domestic fuel prices remain well below their historic peaks recorded in early April when petrol reached Rs458.41 per litre and HSD touched Rs520.35 per litre following an initial surge in global oil benchmarks. The price increase is anticipated to put immediate economic pressure on both retail consumers and commercial sectors across the country. Because high speed diesel powers agricultural machinery and the vast majority of heavy transport fleets, the Rs3.72 per litre increase is expected to raise freight costs and potentially drive up prices for essential goods and food commodities.
Meanwhile, the steep Rs12.90 hike in petrol will directly impact daily commuting expenses for motorcycle owners, rickshaw drivers, and private motorists.
