Petrol powers cars. Diesel powers Pakistan -- trucks, buses, coaches, minibuses, railway locomotives, ships, cargo vessels. tractors, tube-wells, threshers, combined harvesters, water pumps, generators, construction equipment, cranes, mining machinery, fishing boats and trawlers.
Diesel goes into the tractor that grows the wheat. Into the thresher that harvests it. Into the truck that carries it to the mill. Into the van that delivers the flour to the kiryana store. At every step — Rs354 per litre.
Pakistan’s diesel costs Rs354 per litre today. India’s diesel costs the equivalent of Rs314 per litre. Bangladesh’s costs the equivalent of Rs292 per litre. Pakistan is paying Rs40 more per litre than India and Rs62 more than Bangladesh for the same fuel -- imported from the same Gulf, priced against the same benchmark, shipped across the same sea.
The trucker. The bus driver. The farmer. The tube-well operator. The fisherman. The factory owner with his generator. The small trader with his delivery van. Every one of them runs on diesel. Every one of them pays Rs354 per litre.
The reality: Pakistan produces approximately 60 per cent of its diesel domestically at costs far below the international benchmark.Cold fact: If Pakistan priced its diesel at what Bangladesh charges its consumers, Pakistanis would save Rs589 billion a year. That is Rs 20,000 per Pakistani family. Every year. For the same fuel. From the same Gulf.
Why is diesel expensive in Pakistan? Three answers. First: a government-owned oil marketing company holds a monopoly on diesel imports -- granted by the same government that regulates the price. No competition. No check. No audit. On July 21, 2026, the federal cabinet made it permanent -- formalising the OMC as the sole diesel importer for the entire fiscal year.
Second: 60 per cent of Pakistan’s diesel is produced domestically at costs well below the international benchmark. The windfall goes to the refineries (in April 2026, the government capped the crack spread).
Third: The refinery which is 60 per cent owned by the government controls 44 percent of Pakistan’s refining market. The government owns the formula, the importer, the refineries and the levy. The consumer owns the bill.
Expensive diesel does not stay at the pump. It travels. Into the freight rate of every truck on every motorway. Into the bus fare of every commuter in every city. Into the cost of every kilo of wheat, every bag of flour, every tray of eggs that reaches your kitchen. Into the electricity bill of every factory running a generator through load-shedding. Into the cost of every vegetable grown with a diesel tube-well, harvested with a diesel thresher, transported in a diesel van.
Red alert: Diesel inflation is not one price. It is every price. When diesel costs Rs62 more than Bangladesh, everything that diesel touches costs more than it should. And diesel touches everything.
Can it be fixed? Yes. Five steps. One: Break the state-owned OMC’s diesel import monopoly. Two: A cost-plus formula for domestic refinery output. Three: Mandate independent audit of the OMC’s declared import costs. Four: Cap the petroleum levy. Five: Publish the daily Platts price on Ogra’s website every morning.The government read the problem. It fixed the clock. It did not fix the formula.
The writer is an Islamabad-based columnist.
