The Government of Pakistan has announced the latest fuel prices, effective from May 16 to May 31, 2025, providing some relief to the public—particularly for diesel consumers. According to the new rates issued by the Ministry of Finance, the price of high-speed diesel (HSD) has been reduced, while petrol prices remain unchanged for the second half of May.
Revised Fuel Prices
According to the official notification issued by the Ministry of Finance, and based on recommendations from the Oil and Gas Regulatory Authority (OGRA), the updated fuel prices for the second half of May 2025 are as follows:
- Petrol: Rs 252.63 per litre (No change)
- High-Speed Diesel (HSD): Rs 254.64 per litre (a reduction of Rs 2.00)
These prices are set to remain in effect until the end of May, and are part of the government’s regular bi-monthly price review.
Why Only Diesel Got a Cut?
The reduction in diesel prices comes in response to a downward trend in international oil markets, which has created room for local price adjustments. However, the government has chosen not to pass on the full benefit of falling oil prices to petrol consumers. Instead, it has opted to keep petrol rates steady as part of a broader economic management strategy.
A key reason for maintaining the current petrol price is the government’s decision to increase the Inland Freight Equalization Margin (IFEM) by Rs 1.87 per litre, aimed at offsetting financial shortfalls. This move is aimed at recovering a Rs 34 billion revenue shortfall caused by a tax exemption on diesel and kerosene introduced in the Finance Act 2024-25. By increasing the freight margin, the government plans to spread out the recovery of the shortfall over the next 12 months.
Impact on the Public and Economy
1. Relief for the Transport Sector
High-speed diesel is extensively used across the transport and agriculture sectors. The Rs 2 cut in diesel prices is likely to reduce freight charges, which could, in turn, lower the prices of essential goods, particularly food items.
2. Controlled Petrol Price for Stability
By keeping petrol prices unchanged, the government is avoiding sudden changes in consumer fuel costs, ensuring a level of price stability in urban transportation where petrol is primarily used.
3. Infrastructure Development Focus
According to reports, the government aims to redirect some of the savings and controlled fuel revenue towards infrastructure projects, particularly in underdeveloped regions like Balochistan and Sindh.
Looking Forward
With the next pricing review due at the end of May, fuel prices may again be revised based on global oil trends, exchange rates, and domestic fiscal needs. Garibaaz will keep you updated as the government continues to monitor international markets while balancing inflation control and development goals.
