The federal government on Thursday increased the prices of petrol and high-speed diesel (HSD) by Rs1.09 and Rs2.42 per litre respectively as Petroleum Minister Ali Pervaiz Malik indicated that a targeted fuel subsidy mechanism could return if Middle East tensions persist.
Following the latest revision, petrol will retail at Rs336.15 per litre, while HSD will cost Rs393.04 per litre. The new prices take effect on Friday, July 31. The government continues to levy Rs110 per litre in taxes and duties on petrol and Rs96 per litre on diesel.
The price hike comes alongside warnings of further economic measures.
At a Senate Standing Committee on Petroleum meeting, Malik stated that the government could reintroduce targeted fuel subsidies within the next few days, supported financially by the provinces, if renewed United States (US)-Iran tensions continue to impact international markets.
“If this matter does not end in a few days, we will bring back the targeted subsidy mechanism that we previously used to prevent the price shock from reaching the people,” Malik said, adding that Prime Minister Shehbaz Sharif had initially provided Rs130 billion in fuel subsidies before bringing provincial governments on board.
Malik noted that real relief would only reach the public when the US-Iran conflict ends and global oil prices fall.
Addressing constraints under Pakistan’s International Monetary Fund (IMF) programme, Malik explained that recovering legitimate fuel costs from consumers remains necessary to avoid artificial price controls.
The government also affirmed its plan to proceed with petroleum price deregulation and defended the transition to daily price revisions by the Oil and Gas Regulatory Authority (Ogra).
“We have tied our hands ourselves and handed over a transparent system to the people,” Malik said, stating that OGRA publishes its pricing models on its website to pass international market changes directly to consumers and avoid major weekly or fortnightly price shocks.
On the other hand, the government committee headed by the petroleum minister reviewed the daily pricing system on Thursday and officially appreciated the formula for enhancing transparency and reducing volatility.
Fuel prices have seen sharp fluctuations since the US-Iran war broke out on February 28. HSD surged from Rs281 per litre to a peak of Rs520.35 on April 3, while petrol rose from Rs266 in early March to a peak of Rs458.41 on April 3.
Changes in petrol prices directly hit middle- and lower-middle-class consumers using private transport, small vehicles, two-wheelers, and rickshaws. Diesel price adjustments impact the broader public through heavy transport, power generation, and large generator operational costs. Petrol and HSD remain the country’s main petroleum revenue earners, with monthly sales between 700,000 and 800,000 tonnes, compared to 10,000 tonnes for kerosene.
