Key Takeaways
- Petrol price increased by Rs6.39 per litre, now at Rs327.12.
- Diesel price raised by Rs7.83 per litre, currently at Rs375.04.
- Daily pricing of fuel will be based on international market trends.
The government has increased the prices of petrol and high-speed diesel (HSD) in Pakistan to reflect rising global oil prices following renewed hostilities in the Persian Gulf region. The new rates, effective from July 23, have seen petrol priced at Rs327.12 per litre and HSD at Rs375.04.
This decision comes after negotiations between the All Pakistan Petroleum Pump Owners Association (APPPOA) and the petroleum minister led to a deferral of a nationwide strike by two weeks. The previous strike was called in response to daily price revisions that had been causing significant inconvenience for transport operators and consumers alike.
The hike in fuel prices follows a period where diesel reached its peak at Rs520.35 on April 3, having started rising from Rs281 per litre after the US-Iran conflict began on February 28. Petrol had peaked at Rs458.41 on April 3, after starting its upward trajectory in early March from Rs266.
In an effort to manage fuel prices more dynamically and address market volatility, the government has announced that daily pricing of petrol and diesel will be based on international market trends. This change was announced by Petroleum Minister Ali Pervaiz Malik, who stated that the cabinet and prime minister had decided to delegate this responsibility to the Oil and Gas Regulatory Authority (Ogra).
The move towards daily pricing is expected to provide more accurate and timely adjustments to fuel prices, reducing the need for frequent weekly revisions. However, the decision has been met with resistance from some quarters; the All Pakistan Dealers Association has expressed its intention to consider a protest plan this week.
Petrol and HSD are significant revenue earners in Pakistan, with monthly sales of approximately 700,000 to 800,000 tonnes compared to just 10,000 tonnes for kerosene. These fuels primarily serve private transport, small vehicles, rickshaws, two-wheelers, and the heavy transport sector, power plants, and large generators.
The government's decision is aimed at aligning domestic fuel prices more closely with global market conditions, which have been fluctuating due to ongoing regional tensions. This adjustment is expected to impact various sectors of the economy, particularly those heavily reliant on diesel for operations.
