Key Takeaways
- Petrol price increased by Rs 5.44 to Rs 316.15 per litre.
- HSD price hiked by Rs 31.05 to Rs 354.35 per litre.
- Government will now set fuel prices daily based on international benchmarks.
The government has announced a significant increase in petrol and high-speed diesel (HSD) prices, effective from July 18 to July 20. Petrol prices have risen by Rs 5.44 per litre to reach Rs 316.15, while HSD prices have surged by Rs 31.05 per litre to Rs 354.35.
Federal Minister for Petroleum Ali Pervaiz Malik stated that the new pricing mechanism is a step towards deregulation and will be based on daily updates from Platts' 7-day moving average data, published by the Oil and Gas Regulatory Authority (OGRA).
The decision has sparked concerns among industry stakeholders. The All Pakistan Petroleum Dealers Association expressed reservations, warning of potential disruptions in fuel transportation and operations. They urged the government to consult with key players before finalizing the policy.
Oil Marketing Companies (OMCs) have also raised serious concerns about the daily price changes. They highlighted that such frequent adjustments could complicate stock valuation, inventory management, and cash flow processes. OMCs further warned that this move might hurt dealers' margins and confuse consumers.
The government's decision comes in response to renewed hostilities between Iran and the US, which have led to increased import premiums and global fuel prices. The minister noted that the cabinet had decided to hand over daily pricing responsibilities to OGRA due to these market fluctuations.
Prior to this announcement, petrol prices had peaked at Rs 458.41 on April 3, while diesel prices reached a peak of Rs 520.35 in early May. Both prices have since been revised multiple times as the government sought to manage fuel costs amid regional tensions and potential supply disruptions.
Industry stakeholders are urging caution and consultation before implementing such a significant change. Malik acknowledged that the retail sector is not yet fully prepared for daily price changes, which could lead to market uncertainty and operational challenges.
The government has taken another step towards deregulation; OGRA will announce petroleum prices daily based on Platts' 7-day moving average data.
Ali Pervaiz Malik, Federal Minister for Petroleum
We urge the government to consult stakeholders before finalizing this move. Daily price changes could disrupt our operations and confuse consumers.
President, All Pakistan Petroleum Dealers Association, Industry Stakeholder
