Diesel price jacked up by Rs2.78

The government on Monday increased the price of high-speed diesel (HSD) by Rs2.78 per liter effective from Sept 16, 2025.

However, it maintained the existing price of petrol at Rs264.61 per liter. The HSD price has been hiked to Rs272.77 per liter compared to the old price of Rs269.99 per liter.

The finance ministry in a statement, said that the government has revised the prices of petroleum products for the fortnight, commencing September 15, 2025, based on the recommendations of the Oil and Gas Regulatory Authority (OGRA) and the relevant ministries.

Diesel is mainly used in the transport and agriculture sectors. Therefore, an increase in its price will have a large impact on the lives of consumers due to its inflationary effects. Petrol is used by motorists and cars and is considered to be an alternative to compressed natural gas

gas (CNG).

CNG stations in Punjab have been using imported gas over a decade due to a shortage of indigenous gas. Therefore, the demand of petrol has also increased, especially in Punjab.

The oil industry had expected an increase in the price of high-speed diesel up to Rs4.79 per litre in the first half of September. It had also expected a dip in the price of petrol by Rs1.61 per litre.

But these estimates did not include foreign exchange losses, which are normally booked by oil marketing companies and passed on to consumers through price revisions.

This created a room for significant adjustments, depending on the rupee-dollar exchange rate, which has remained volatile in recent weeks.

The projected relief had come following a fluctuation in the global oil prices, where motor gasoline premiums are calculated at $6.37 per barrel and HSD at $3.20 per barrel.

Domestic pricing also factors in the Inland Freight Equalisation Margin (IFEM), which currently stands at Rs8.05 per litre for petrol and Rs6.20 per litre for diesel, alongside the Petroleum Levy (PL) and the Climate Support

Levy (CSL).

The government is charging a petroleum levy of over Rs77 per liter from the consumers to meet its current expenditures. This levy was supposed to develop oil infrastructure, especially oil storage in the country to maintain strategic stocks. But the government had misused this collection and spent it on meeting its current expenditure.