Motor Spirit (MS petrol) and High-Speed Diesel (HSD) prices in Pakistan are expected to see a major cut from January 1, 2026, as falling international oil prices and lower spreads create room for relief. Estimates suggest petrol prices may fall by Rs. 9.16 per litre, while diesel could drop by Rs. 9.96 per litre, offering welcome relief to consumers after weeks of high fuel costs.
According to Arif Habib Limited (AHL), the decline in global oil prices has reduced ex-refinery rates, creating space for a significant downward adjustment in domestic fuel prices. However, part of this benefit is expected to be used to increase Oil Marketing Companies’ (OMCs) margins by Rs. 0.61 per litre in the upcoming pricing cycle.
An industry source noted, “Lower international prices are easing pressure on ex-refinery costs, but margin adjustments may slightly limit the full benefit for consumers.”
In the previous fortnight, the federal government had announced only a minor reduction in fuel prices. Petrol prices were cut by Rs. 2.00 per litre to Rs. 263.45, while HSD prices fell by Rs. 4.79 per litre to Rs. 279.65. The expected January revision, if approved, would be a much steeper reduction compared to the last adjustment.
A sharp fall in petrol and diesel prices could help ease inflationary pressure, particularly on transport and food costs, which are heavily linked to fuel prices. Economists believe sustained softness in global oil markets could provide further space for relief in coming months, provided exchange rate stability continues
