The federal Government has decided to keep fuel prices unchanged for another week, placing a heavy burden of Rs. 45 billion on the state treasury. High-speed diesel (HSD) is now being subsidized by around Rs. 118 per litre.
According to the Oil and Gas Regulatory Authority (OGRA) and industry data, the ex-refinery price of diesel rose sharply from Rs. 330.19 to Rs. 438 per litre between February 16 and March 21, 2026. Instead of passing this increase to consumers, the Government adjusted the price differential claim, keeping the final retail price steady at Rs. 335.86 per litre.
The retail price includes fixed components such as the petroleum levy (Rs. 55.24), climate support levy (Rs. 2.50), and margins for oil marketing companies and dealers. The gap between actual cost and retail price is now being absorbed by the Government, adding to fiscal pressure.
Mohammed Sohail, CEO of Topline Securities, warned that maintaining such a large subsidy is not sustainable if global oil prices remain high and the Pakistani rupee continues to weaken. Diesel is a crucial fuel for both transport and agriculture, meaning prolonged subsidies could strain public finances further.
While keeping fuel prices stable provides short-term relief to consumers, experts caution that delaying price adjustments may result in a sharper increase during the next weekly review.
In other related news also read KP Sets New Fuel Usage Rules for Offices
The Government’s policy reflects a delicate balance between protecting consumers and maintaining fiscal stability. Rising subsidies highlight the challenge of managing public finances while ensuring that citizens do not face sudden price shocks amid global energy price pressures.
