Business Desk 
Mar 16, 2026
The federal government has announced a major increase in price of kerosene oil, affecting households and businesses that rely on it for energy.
Prime Minister Shehbaz Sharif-led government has approved Rs23 billion price differential subsidy for payments to oil marketing companies (OMCs) to keep the prices of two other petroleum products — includes petrol and high-speed diesel (HSD) — unchanged.
With the price adjustments, kerosene oil has become the most expensive household product at Rs358 per litre and has seen the highest hike among all petroleum products.
Ministry of Energy (Petroleum Division) said the premier had approved keeping the prices of HSD and petrol unchanged, and that the government will pay the price differential of Rs75.05 per litre and Rs49.63 per litre on HSD and MS, respectively, to OMCs.
The prime minister said that this move aimed to ease financial burden on citizens. “In this regard Finance Division, has obtained approval of the cabinet for the creation of the ‘Prime Minister’s Austerity Fund’ and of ECC for allocation/ transfer of a sum of Rs27.1 billion to the fund. An amount of Rs23 billion will be transferred to Oil & Gas Regulatory Authority (OGRA) for the said purpose from the fund,” the notification said.
Earlier, in an address to the nation on March 9, PM Shehbaz announced that both the federal and provincial governments would adopt austerity and simplicity to reduce expenditures and conserve energy during the challenging economic situation.
