Key Takeaways
- Petrol price increased by Rs4.93 per litre, now at Rs320.73.
- High-speed diesel (HSD) price raised by Rs7.15 per litre, reaching Rs367.21.
- Daily fuel pricing mechanism introduced to align with international standards.
The government has increased the prices of petrol and high-speed diesel (HSD) in Pakistan, effective from July 22, as a response to fluctuating global oil market prices following renewed hostilities in the Middle East. The new price for petrol stands at Rs320.73 per litre, up by Rs4.93, while HSD will cost Rs367.21 per litre, an increase of Rs7.15.
The decision to adjust fuel prices daily was announced on Friday and is based on a seven-day weekly average of international market prices. This move aims to ensure that the impact of global price changes is immediately passed onto consumers, providing greater transparency in pricing mechanisms.
Petrol is primarily used for private transport, small vehicles, rickshaws, and two-wheelers, affecting the middle and lower-middle classes significantly. High-speed diesel, on the other hand, is widely used in heavy transport sectors, power plants, and large generators, impacting a broader section of the public.
The government had been adjusting fuel prices weekly since early March due to ongoing conflicts between Iran and the United States, which threatened oil supplies through the Strait of Hormuz. Despite initial declines following the Iran-US peace deal, domestic fuel prices started rising again as hostilities resumed.
In April, the federal government announced targeted relief measures to provide subsidised fuel to ease the burden on consumers. However, these measures have not been sufficient to mitigate the impact of global price fluctuations.
The All Pakistan Dealers Association has expressed concerns over the daily pricing mechanism and is considering a protest plan this week. The association believes that frequent changes in prices could disrupt business operations and lead to confusion among consumers.
Petrol and high-speed diesel are major revenue earners, with monthly sales of about 700,000 to 800,000 tonnes compared to just 10,000 tonnes for kerosene. The government's decision is expected to have a significant impact on the economy and daily life in Pakistan.
The petroleum minister stated that the cabinet and prime minister had decided to give the Oil and Gas Regulatory Authority (Ogra) the responsibility of deciding fuel prices on a daily basis based on international market trends.
