However, the government has maintained the existing prices of petrol. After the recent reduction, the diesel will be sold at Rs265.65 per litre against the old price of Rs279.65 per litre, recording a cut of Rs14 per litre.
However, the price of petrol has been maintained at Rs263.45 per litre.
High-speed diesel is widely used in the transport and agriculture sectors; as a result, any fluctuation in its price has a direct bearing on the cost of living for consumers and farmers alike.
The substantial reduction of Rs14 per litre in the diesel price is therefore expected to be welcomed by the public, as it may help ease inflationary pressures for consumers.
Petrol, which is primarily used in motorbikes and cars, has not seen any reduction. As such, the government’s decision offers little relief for motorists, with the petrol price remaining unchanged.
Petrol also serves as an alternative to CNG, and its consumption has risen, particularly in Punjab, following the ban on indigenous gas at CNG outlets. CNG stations in the province now rely on imported gas, which is significantly more expensive.
Based on prevailing tax rates, the oil industry had projected a reduction of up to Rs11.85 per litre, or about 4.2 per cent, in the price of high-speed diesel, depending on final calculations. Petrol prices were projected to decline by around 36 paisas per litre, or 0.1 per cent.
On December 9, the Economic Coordination Committee (ECC) of the cabinet approved an additional margin of Rs2.56 per litre on petrol and diesel to improve the profitability of oil marketing companies (OMCs) and their dealers.
Although the General Sales Tax (GST) remains zero on all petroleum products, consumers continue to pay higher petroleum levies and climate support levies. During the first fortnight of December, consumers paid a petroleum levy of Rs78 per litre on diesel and Rs82 per litre on petrol and high-octane products, which included a climate support levy of Rs2.50 per litre.
The government recovered approximately Rs1.161 trillion through the petroleum levy alone in fiscal year 202425 and expects collections to rise by about 27 per cent to Rs1.470 trillion during the current fiscal year.
LNG prices
The Oil and Gas Regulatory Authority (OGRA) on Monday notified a reduction in the prices of re-gasified liquefied natural gas (RLNG) for December.
According to OGRA, the RLNG transmission price for Sui Northern Gas Pipelines Limited (SNGPL) has been fixed at US$10.9186 per MMBtu, while the distribution price stands at US$11.8280 per MMBtu. This reflects a decrease of US$0.5119 (4.48 per cent) in transmission and US$0.5716 (4.61 per cent) in distribution prices compared to November 2025.
For Sui Southern Gas Company Limited (SSGCL), OGRA has set the RLNG transmission price at US$9.4741 per MMBtu and the distribution price at US$10.7767 per MMBtu. These figures represent a decline of US$0.5911 (5.87 per cent) in transmission and US$0.6753 (5.90 per cent) in distribution from the previous month.
OGRA said the reduction in RLNG prices is in line with federal government policy guidelines and is primarily the result of a decrease in the Delivered Ex-Ship (DES) price.