ISLAMABAD – Just days after announcing the federal budget, the government has increased petrol and diesel prices, further burdening the public amid rising inflation. According to the Ministry of Finance, the price of petrol has gone up by Rs4.80 per litre, while high-speed diesel has seen an even sharper hike of Rs7.95 per litre.
With this increase, the new price of petrol stands at Rs258.43 per litre, and high-speed diesel at Rs262.59 per litre. The revised rates took effect from midnight and will impact transportation, goods delivery, and everyday costs for citizens. The Finance Ministry attributed the hike to changes in global oil prices and fiscal adjustments.
In addition to this, the federal government has introduced a carbon levy of Rs2.5 per litre on petrol, diesel, and furnace oil as part of the 2025-26 budget. This move is expected to generate Rs45 billion in revenue during the upcoming fiscal year. Officials stated that the carbon levy is being implemented under commitments made to the International Monetary Fund (IMF).
Notably, the carbon levy is set to increase further in the next financial year. By 2026-27, it will double to Rs5 per litre. While the government claims the tax is aimed at environmental reform, many citizens and transporters fear it will lead to additional price hikes in essential goods and services.
This increase follows a smaller hike earlier this month, when petrol prices rose by Re1 per litre. With back-to-back increases and new levies, the public is voicing concerns over the growing financial pressure on households already struggling with rising electricity and food costs.
As prices surge, economic analysts warn of a ripple effect across various sectors. They stress the need for relief measures or targeted subsidies to protect low-income groups from the full brunt of these changes.