Islamabad: There is a strong possibility of major increases in petroleum product prices across the country.
Due to ongoing tensions in the Gulf region and rising hostility between the United States and Iran, petroleum prices are expected to go up by as much as 9.47 rupees per litre for the next fifteen-day period starting February 1, 2026.
According to estimates prepared by relevant authorities, high-speed diesel could rise by up to 9.47 rupees per litre, kerosene oil by 3.69 rupees per litre, and light diesel oil by 6.95 rupees per litre.
Fuel prices in Pakistan are reviewed and usually adjusted every two weeks by the government, mainly based on recommendations from OGRA, the Oil and Gas Regulatory Authority.
The biggest factor is the international price of crude oil and finished petroleum products, since Pakistan imports almost all of its crude and a large part of refined fuels.
When global prices rise due to supply issues, geopolitical tensions, OPEC decisions, or higher demand, local prices tend to follow.
Another major influence is the exchange rate of the Pakistani rupee against the US dollar.
Imports are paid in dollars, so if the rupee weakens, the same amount of fuel costs more in rupees, pushing pump prices up.
A stronger rupee can sometimes bring relief.
Taxes and government levies also play a very large role in the final price consumers pay.
These include the petroleum development levy, general sales tax, excise duty, and other charges.
The government often changes these rates to control inflation, give relief during tough times, or collect more revenue when needed.
The base price is calculated using an import parity formula that includes the cost of importing the product, freight to Pakistan, port charges, and other incidentals, plus margins for oil companies and dealers.
Smaller factors like domestic transportation costs and dealer commissions also get added, but they usually have less impact compared to global prices, the exchange rate, and taxes.
In short, world oil markets and the rupee-dollar rate drive most of the changes, while taxes and policy decisions give the government some ability to adjust or absorb part of the increase for consumers.
