The federal government has increased the price of petrol by Rs4.10 per litre and High-Speed Diesel (HSD) by Rs6.41 per litre, with the new rates taking effect from September 16.
Following the revision, petrol will cost Rs384.34 per litre while HSD will be sold at Rs415.83 per litre. The government continues to collect Rs114 per litre in taxes and duties on petrol and Rs100 per litre on diesel, according to the Petroleum Division’s notification.
The price revision comes as oil prices rose by nearly $3 in the international market after oil loadings at Saudi Arabia’s Red Sea port of Yanbu were suspended and Libya halted operations at three oil fields, raising concerns over disruptions to key oil supply routes.
Brent crude futures rose $2.81, or 2.66 percent, to $108.49 a barrel, while United States (US) West Texas Intermediate (WTI) futures increased $3.29 to $104.68 a barrel.
With Gulf energy transit routes effectively closed and fuel prices rising, members of the federal cabinet on Tuesday raised concerns over the country’s energy situation, including fuel supplies and power generation.
Energy Minister Sardar Awais Ahmad Khan Leghari and Climate Change Minister Musadik Malik outlined how disruptions in the Hormuz and Bab El-Mandeb straits could have worsened shortages. They also said that international oil prices were putting pressure on the government’s ability to absorb price shocks, while maintaining that the situation could have been worse without the government’s planning.
The latest increase follows a sharp movement in domestic fuel prices since the start of the year. HSD had reached Rs520.35 per litre on April 3 after rising from Rs281 per litre following the outbreak of the US-Iran war on February 28. Petrol also peaked at Rs458.41 per litre on April 3 after beginning its rise from Rs266 in the first week of March.
On September 13, Prime Minister Shehbaz Sharif announced a relief scheme for motorcycle, auto-rickshaw and vehicles up to 800cc users in response to rising global oil prices.
Under the scheme, owners of two- and three-wheelers will receive relief of Rs100 per litre on a monthly quota of 20 litres, while owners of vehicles up to 800cc will receive the same relief on a monthly quota of 30 litres, according to the Prime Minister’s Office.
The government had also changed the way fuel prices are revised earlier this year. Petroleum Minister Ali Pervaiz Malik announced on July 17 that fuel prices would be fixed daily due to fluctuations in international market prices following renewed hostilities between Iran and the US.
Before the daily pricing mechanism, the government had been announcing weekly fuel-price revisions since early March, along with fuel-conservation measures over possible supply disruptions linked to the conflict in the Middle East. The federal government had also announced targeted measures in April to provide subsidised fuel.
Petrol is mainly used in private transport, small vehicles, rickshaws and two-wheelers, making price changes relevant to middle- and lower-middle-income users. HSD is widely used in heavy transport, power plants and large generators.
Petrol and HSD also account for most of the revenue generated from petroleum products, with monthly sales of around 700,000 to 800,000 tonnes compared with monthly kerosene demand of about 10,000 tonnes.
