In 2025, Pakistan faces another surge in fuel prices driven by global market volatility and domestic fiscal adjustments. The government’s recent decision to revise Regulatory Duty (RD) and General Sales Tax (GST) on petroleum products has sparked nationwide concern. These changes directly affect household expenses, transportation costs, and overall inflation, further tightening the financial pressure on the general population.
Recent Changes in Fuel Pricing Policy
| Fuel Type | June 2025 Price (PKR/L) | July 2025 Price (PKR/L) | Change |
|---|---|---|---|
| Petrol | 258.16 | 275.00 | +16.84 |
| Diesel | 267.00 | 290.50 | +23.50 |
Source: OGRA (Oil and Gas Regulatory Authority)
Key Policy Changes in July 2025
- GST Increased: From 0% to 18% on petroleum products.
- RD Reinstated: Up to 20% RD re-imposed on imported fuels.
- Petroleum Development Levy (PDL): Increased to PKR 60/litre, the legal maximum.
Graph: Fuel Price Increase vs Inflation Rate (2023-2025)
Note: For reference only. Actual inflation data by PBS.
Impact on General Population
🔹 Transportation Costs
Public transport fares have gone up by 10-25% in major cities like Lahore, Karachi, and Islamabad. Ride-hailing apps like Careem and InDrive have also hiked base fares, impacting commuters daily.
🔹 Inflation & Essentials
Increased fuel prices inflate the cost of food, clothing, and medicine due to higher transportation and manufacturing costs. According to the Pakistan Bureau of Statistics, inflation hit 24.9% YoY in June 2025 — largely fueled by energy prices.
🔹 Lower-Income Households
Daily wage earners and low-income families are hit hardest. A household earning below PKR 40,000/month now spends over 25% of its income on utilities and transport alone.
Visual: Impact Breakdown
Fuel Price Impact on Daily Expenses
Government Justification & Public Reaction
The government claims these taxes are essential for IMF compliance and fiscal recovery. However, critics argue that indirect taxation (like fuel-based GST) unfairly targets the poor, while exempting the elite.
Nationwide protests, particularly by transport unions and civil rights groups, are mounting pressure on the Ministry of Finance to roll back or subsidize fuel prices.
Conclusion
While the government’s effort to boost tax revenue and reduce deficits is understandable, the burden of indirect fuel taxation falls heavily on the general population. Without targeted subsidies, energy reforms, or income-based tax adjustments, millions of Pakistanis will continue to suffer under the weight of rising fuel costs and inflation.