When Brent crude moves above $100 a barrel, Pakistan does not automatically raise petrol by the same percentage. But the pressure moves through several channels.
The first is the import bill. Pakistan is a net importer of crude oil, refined petroleum products and LNG. Higher dollar prices mean more foreign exchange is needed for the same amount of energy. If the rupee also weakens, the local-currency cost rises further.
The second channel is transport. Diesel is used by trucks, buses, farm machinery and generators. Higher diesel costs can therefore appear in food, construction materials and manufactured goods because almost everything must be transported.
The third channel is electricity. Pakistan’s power mix includes domestic sources as well as imported fuels. When imported LNG, coal or oil become more expensive, generation costs can rise, although the exact impact depends on which plants are running and how tariffs are adjusted.
Government policy matters too. Retail petrol and diesel prices include taxes and levies, so authorities can temporarily absorb or amplify changes by altering fiscal charges. Price adjustments also occur with a lag rather than minute by minute with global markets.
The IMF’s 2026 Pakistan review highlighted the country’s heavy exposure to Gulf energy, noting that 81% of fuel imports came from the region. That makes a Middle East supply shock especially important.
Higher oil can also affect interest rates indirectly. If fuel pushes inflation higher and weakens the currency, the central bank may have less room to cut rates.
The result is a chain rather than a single price link: global crude and freight costs affect the dollar import bill; the exchange rate converts that cost into rupees; taxes and pricing formulas shape retail fuel; and transport and electricity then spread the shock through the wider economy.