Pakistan government has decided not to reduce fuel prices despite a drop in global oil rates. Instead, the savings will be used to fund major road and irrigation projects in Balochistan and Sindh.
Prime Minister Shehbaz Sharif announced that the petroleum levy has been increased from Rs 70 to Rs 80 per litre to prevent a price cut of about Rs 10 per litre on petrol and diesel. The move aims to generate funds for highway upgrades and development projects in underdeveloped regions.
Why Are Fuel Prices Not Decreasing?
Global oil prices have fallen by 6 per barrel for petrol and 5 per barrel for diesel, which could have led to lower prices at the pump. However, the government has chosen to keep fuel prices steady and use the extra revenue for infrastructure.
Current Fuel Prices in Pakistan (June 2024)
| Fuel Type | Price (Rs per litre) | Petroleum Levy (Rs) | Total Taxes (Rs) |
| Petrol | 254.63 | 80 | 96-97 |
| Diesel | 258.64 | 80 | 96-97 |
Where Will the Money Be Spent?
The government plans to use the additional funds for:
- Upgrading N-25 Highway (Karachi to Chaman) – A Rs 300 billion project to transform the dangerous single-lane road into a modern motorway-standard highway.
- Completing Kachhi Canal Phase-II – A Rs 70 billion irrigation project to boost agriculture in Balochistan.
- Solarizing Tubewells – A joint federal-provincial initiative to provide solar-powered water pumps to farmers.
PM Shehbaz called the decision a “step towards ending Balochistan’s neglect“, saying the N-25 highway has caused over 2,000 deaths due to poor conditions.
IMF Agreement and Future Taxes
Pakistan has also committed to the International Monetary Fund (IMF) to introduce a carbon tax of Rs 5 per litre from July 1, 2024, as part of a $1.3 billion loan program. This could lead to higher fuel prices in the coming months.
Public Reaction
While the move supports long-term infrastructure development, some citizens are unhappy as they expected fuel price relief. However, officials argue that keeping prices stable prevents increased demand and saves foreign exchange.
- Petrol & diesel prices remain unchanged despite global oil price drop.
- Petroleum levy increased to Rs 80 per litre to fund development.
- N-25 Highway and Kachhi Canal to be prioritized in Balochistan.
- Carbon tax coming in July may further increase fuel costs.
FAQs: Pakistan’s Fuel Price Decision Explained
Why didn’t Pakistan reduce fuel prices despite global oil prices falling?
The government increased the petroleum levy to Rs 80 per litre to generate funds for road and irrigation projects in Balochistan and Sindh instead of passing on the price cut to consumers.
What is the current price of petrol and diesel in Pakistan?
Petrol: Rs 254.63 per litre
Diesel: Rs 258.64 per litre
Which projects will be funded by the increased petroleum levy?
The money will go towards:
- Solar-powered tubewells in Balochistan
- N-25 Highway upgrade (Karachi to Chaman)
- Kachhi Canal Phase-II completion
Will fuel prices increase in July 2024?
Yes, a carbon tax of Rs 5 per litre will be added from July 1 as part of Pakistan’s IMF agreement, likely increasing fuel costs.
How will the N-25 Highway upgrade benefit Pakistan?
The Rs 300 billion project will convert the dangerous single-lane road into a dual-carriage motorway, reducing accidents and improving trade routes between Balochistan and Sindh.
