Pakistan Raises Fuel Prices Amid Middle East Oil Volatility

The Government of Pakistan implemented a new daily fuel pricing mechanism in August 2026 to pass global oil price volatility directly to consumers. Under this framework, the Oil and Gas Regulatory Authority (OGRA) calculates ex-depot prices based on a seven-day average of international market prices, removing the need for prior approval from the prime minister.

Between August 18 and August 21, the country saw a series of rapid price adjustments. On August 18, petrol rose by Rs5.77 to Rs331.2 and high-speed diesel (HSD) increased by Rs6.47 to Rs390.4. Prices climbed again on August 19, with petrol reaching Rs334.54 and HSD hitting Rs395.69. By August 21, petrol rose further to Rs337.78, while HSD was adjusted to Rs364.70 following a sharp one-day reduction of Rs32.63.

These fluctuations are driven by a rally in Brent crude and West Texas Intermediate futures, fueled by instability in the Middle East. Contributing factors include the closure of the Strait of Hormuz by Tehran and the collapse of a June truce between Washington and Tehran. These disruptions have increased import costs, putting pressure on Pakistan's foreign exchange reserves and contributing to domestic inflation. The government continues to levy significant taxes on these products, including Rs114 per litre on petrol and Rs100 per litre on high-speed diesel.