Focus Pakistan Analysis
The government has done its part twice in two days, and cumulatively Rs283 per litre since the crisis peak. The next move belongs to the airlines. Pakistani passengers, who absorbed fare increases within days of each fuel price hike, will watch closely to see whether reductions travel in the opposite direction with the same speed. History suggests they rarely do.
ISLAMABAD: Each person who purchased a domestic air ticket at Rs40,000 during the country’s aviation crisis of March-April, 2026 needs to know only one figure: Rs283.52. This figure represents the jet fuel cost per litre in the country following Saturday’s government notification, where it came down by Rs48.80 per litre in one revision and by Rs283 per litre since the highest record of Rs494.71 reached just weeks back due to Hormuz crisis
A notification from the Pakistan State Oil fixed the revised ex-depot price of aviation turbine fuel, used in commercial flights, to be Rs283.52 per liter effective immediately. This is despite the fact that the government reduced the prices of petrol and diesel by Rs22 the very previous day, continuing with its consistent effort of reversing the increase in prices caused due to tensions between US and Iran from late February 2026 onwards.
The Rise in Jet Fuel Prices in Pakistan
The rate of jet fuel per liter in Pakistan was Rs188 on February 28, 2026. The first cracks were noticed within hours of the closure of the Strait of Hormuz. Pakistan is highly dependent on jet fuel from the Gulf countries, making its economy very vulnerable. In a matter of days, the Pakistani government increased the jet fuel prices several times. The first jump happened by Rs83 per litre in one single day. Later on, the prices increased even further with the new rate of Rs53.11 per litre set for May 9. As a result, the rate reached Rs441.66 per litre.
The airlines did not eat up those additional costs either, since they couldn’t. Under normal circumstances, jet fuel comprises a staggering 30 to 40 percent of the operating costs of any airline company. That figure swells even more during periods where prices have surged like crazy, such as the one from February through April 2026. The airline companies increased their fares in both domestic and international sectors, owing to the high cost of fuel and also its actual shortage.
That price was remembered by each and every individual Pakistani who either purchased a ticket at that time or did not take a trip due to its high cost. Pakistan’s price of jet fuel has dipped below Rs300 per liter for the first time since the beginning of the current problem situation.
Are Airlines Going to Reduce Their Prices?
This is the very issue that cannot be answered through Saturday’s notice, as the government understands very well. It was revealed that a reduction in both local and foreign flights’ fares is expected to take place due to the fall in the price of aviation fuel, although they did not make a definitive statement on the matter.
And it is a very significant caveat. Airlines use fare systems that do not have the agility to change as rapidly as fuel notification rates. When you buy a ticket well before your flight date, the rate will depend on the cost structure at the time of purchase. Fare adjustment systems will determine the fares dynamically depending on the demand for that route, seat capacity, and cost expectations, and not simply by the current fuel notification rate published by PSO.
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The Bottom Line: Rs283 Per Litre Down, Rs95 Over Previous Level
One figure that is deliberately left out by the government has remained hidden in the statistics. Prior to the Hormuz crisis, jet fuel used in Pakistan was priced at Rs188 per litre. Now it stands at Rs283.52 per litre. There has been a reduction of Rs283 per litre since the peak levels, and that too should be acknowledged as being quite substantial. However, even now, the jet fuel cost in Pakistan remains Rs95.52 per litre above pre-crisis levels.
This is also the reason that airlines might feel hesitant about cutting down their ticket prices despite declining fuel prices. This is because the airlines that had increased their prices during the turmoil were also dealing with a range of expenses other than fuel prices – such as expenses related to airport congestion, re-routes, labor schedules, and the expense of working capital due to the supply crunch.
Light Diesel Oil: The Alternative Source of Respite
In addition to the reduction in prices of aviation fuel, on Saturday, the government also announced the lowering of prices for light diesel oil, which is consumed in industries for power generation, agriculture for farming equipment, and also in small marine engines. With the fall in the prices of light diesel oil, another aspect of relief would come to manufacturing and agriculture industries that had seen tough times due to the hike in energy prices in March and April 2026.
Next in the Watchlist of the Aviation Industry
Pakistani jet fuel currently is at its lowest level compared to pre-Hormuz times. Its future trend will be determined by two factors, which are outside of the control of the Pakistani government. One factor will be global crude oil prices – if Brent crude continues to soften in value to trade within the $88-92 range per barrel, then the ripple effect in the aviation fuel pricing sector can result in lower prices in the coming period. The other factor will be the performance of the PKR relative to the USD, because jet fuel is imported and priced in USD, thus a drop in PKR value will nullify the decline in international prices before being notified at PSO.
As of now, it’s all about heading down from here. This government has succeeded in delivering the biggest jet fuel price cut in a cycle after the crisis hit us. The boarding announcement has been done for the cheap airfares. What follows now is whether Pakistan’s airlines swing open their gates for it.
