ISLAMABAD: Consumers across Pakistan may experience some relief from mid-January, as prices of key petroleum products are projected to decline from January 16, 2026. The anticipated reduction is expected to ease pressure on transportation costs, household fuel expenses and industrial operations at a time when inflationary pressures remain elevated.
According to price projections, the price of petrol, which is primarily used in motorcycles, cars and other small vehicles, is expected to decrease by Rs4.59 per litre. This would bring the price down from Rs253.17 per litre to Rs248.58 per litre. A reduction in petrol prices is likely to provide immediate relief to urban commuters and private vehicle users who have been bearing the brunt of frequent fuel price adjustments.
High-speed diesel, a key fuel for public transport, freight movement, agricultural machinery, tube wells and power generation, is also projected to become cheaper. The price of high-speed diesel is expected to decline by Rs2.70 per litre, falling from Rs257.08 to Rs254.38 per litre. Given diesel’s extensive use across multiple sectors, even a modest reduction can have a broader impact on transport fares, food supply chains and agricultural input costs.
Kerosene oil, which remains an important fuel for low-income households in off-grid and remote areas for cooking and lighting, is projected to see a reduction of Rs1.82 per litre. If implemented, the price would decline from Rs170.88 per litre to Rs169.06 per litre, offering limited but meaningful relief to vulnerable segments of the population that continue to rely on kerosene due to lack of access to alternative energy sources.
Light diesel oil, commonly used in small industries, boilers and backup generators, is also expected to witness a price cut. Projections indicate a decrease of Rs2.08 per litre, bringing the price down from Rs146.18 to Rs144.10 per litre. This reduction could help ease operating costs for small-scale industrial units and commercial users that depend on LDO for energy needs.
At the ex-refinery level, similar downward adjustments are anticipated. Petrol prices are projected to drop by Rs4.59 per litre, from Rs145.57 to Rs140.98. High-speed diesel at the refinery gate is expected to decline by Rs2.70 per litre, moving from Rs155.33 to Rs152.63. Kerosene oil prices may fall by Rs1.82 per litre to Rs141.11, while light diesel oil is projected to decrease by Rs2.08 per litre, settling at Rs123.00.
These projections are based on prevailing assumptions regarding local and international pricing components. Premium Motor Gasoline plus customs levy is assumed at Rs82.12, while high-speed diesel plus customs levy stands at Rs77.91. The Inland Freight Equalization Margin mechanism is assumed to remain at Rs8.97 per litre for petrol and Rs7.25 per litre for diesel. Premiums are estimated at $5.03 per barrel for petrol and $3.20 per barrel for high-speed diesel.
Platts pricing data still has three days remaining, indicating that final prices may undergo minor adjustments before official notification. Any changes in international oil prices or exchange rate movements during this period could influence the final outcome.
If approved by the government, the anticipated reduction in petroleum prices would offer partial relief to consumers, help lower transportation costs and ease cost pressures on agriculture and small-scale industrial activity. While the cuts may not fully offset the impact of high inflation, they could provide some breathing space for households and businesses struggling with elevated living and operating costs.
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