In a dramatic policy reversal, the federal government has reduced petrol prices by Rs80 per litre only a day after imposing one of the largest fuel price increases in Pakistan’s history.

Prime Minister Shehbaz Sharif announced that petrol prices will drop from Rs458.41 per litre to Rs378 per litre starting midnight Saturday, offering partial relief to consumers after Thursday’s unprecedented hike.

The earlier decision had raised petrol prices by Rs137.24 per litre and diesel by Rs184.49 per litre, pushing diesel rates to Rs520.35 per litre and triggering widespread concern over inflation and economic stability.

Global Oil Shock Forces Policy Shift

Authorities had justified the increase by citing rapidly rising international oil prices caused by the conflict involving the United States, Israel and Iran. The crisis has disrupted energy supply chains and heightened fears over shipments passing through the Strait of Hormuz — a key global oil route.

As Pakistan depends heavily on imported fuel, sudden international price movements quickly translate into domestic cost pressures.

Govt Expands Relief Measures

The prime minister said the government reassessed its decision after consultations with national and provincial leadership, acknowledging that the sharp increase would have placed unbearable pressure on households and businesses.

The Rs80 reduction will be funded through a temporary cut in the petroleum levy and will remain effective nationwide for at least one month.

Targeted Subsidies to Continue

Alongside the price cut, previously announced subsidies will remain operational:

• Motorbike users will receive a Rs100 per litre subsidy, limited to 20 litres monthly for three months.
• Small farmers will receive Rs1,500 per acre as diesel cost compensation during harvesting.
• Freight transport vehicles will receive monthly financial assistance of Rs70,000, while larger transport vehicles will get Rs80,000.
• Public passenger buses will receive Rs100,000 per month in support.
• Pakistan Railways will receive assistance aimed at keeping economy-class fares affordable.