Pakistan could be headed for a major reduction in petroleum prices after global crude oil markets tumbled following the Iran-US ceasefire and agreement, raising expectations of significant relief for consumers.

According to petroleum sector sources, petrol and diesel prices in Pakistan could decline by Rs70 to Rs100 per litre in line with the sharp drop in international oil prices, although no formal price calculation has yet been completed.

Sources in the Petroleum Division said consultations were underway on passing the benefit directly to the public, with Prime Minister Shehbaz Sharif keen to ensure consumers receive the maximum possible relief.

Any final reduction will be determined under the existing fuel pricing formula and announced following the prime minister’s approval.

The decline in global oil prices accelerated after reports of a breakthrough between Iran and the United States and expectations that the Strait of Hormuz would fully reopen to commercial shipping.

International benchmark Brent crude fell below $80 a barrel on Tuesday, reaching a three-month low and dropping more than 5%. US benchmark West Texas Intermediate also declined sharply to below $76 a barrel.

Market sentiment improved further after reports that Washington could ease sanctions on Iranian crude exports as part of the agreement aimed at ending months of conflict in the Middle East. The development is expected to allow Tehran to resume large-scale exports of crude and refined petroleum products.

Oil prices had surged dramatically during the conflict. Before the war, crude traded near $73 per barrel but climbed above $126 per barrel at its peak amid fears of supply disruptions and the possible closure of the Strait of Hormuz, a key global energy route.

The sharp fall in prices has triggered growing public calls for corresponding reductions in domestic fuel rates.

Minister of State for Law and Justice Barrister Aqeel Malik also signalled the possibility of substantial relief, saying in a television interview that a major reduction in petroleum prices could coincide with the expected signing of the Iran-US agreement on Friday.

He said the decline could be significant due to international market trends.

Pakistan has witnessed multiple increases and decreases in petroleum prices since the outbreak of the US-Iran conflict earlier this year.

Petrol prices rose to record levels during the height of the crisis before gradually easing as global markets stabilised.

The government most recently reduced petrol prices by Rs4 per litre on June 12, bringing the rate down to Rs373.78 per litre, while diesel prices were cut by Rs2 per litre to Rs378.78 per litre.

Officials said a final decision on any fresh reduction would be taken after a detailed review of international market prices and in accordance with the petroleum pricing mechanism.