Pakistan may cut fuel prices after US-Iran peace deal

Islamabad: Pakistan’s Petroleum Minister Ali Pervaiz Malik has indicated that the government may soon reduce fuel prices in the wake of a peace agreement between the United States and Iran. Speaking to Geo News on Wednesday, Malik promised "good news regarding a reduction in petroleum prices" after the two nations agreed on a framework to end hostilities.

Prime Minister Shehbaz Sharif had earlier assured the public that any decline in global oil prices would be passed on to consumers. The US-Iran peace deal, set to be formalised by Friday, June 19, 2026, includes a commitment to finalise a 14-point Memorandum of Understanding aimed at resolving tensions.

The agreement is expected to end the US blockade of Iran and reopen the Strait of Hormuz, a vital chokepoint for global oil and gas supplies. Hostilities between the US and Iran began on February 28, 2026, following military action by US and Israeli forces against Iran. The announcement of the peace deal led to a sharp drop in oil prices, with Brent crude falling below $80 per barrel — its lowest level since the conflict began — and West Texas Intermediate (WTI) also declining.

The anticipated return of Iranian oil to global markets has raised hopes of easing inflation worldwide. The drop in crude prices also led to lower bond yields. For Pakistan, this relief comes at a critical juncture, as the country’s oil and petroleum import bill surged to $800 million last month. Rising energy costs have placed significant pressure on the government, a concern highlighted by Malik during a recent Cabinet meeting.