The federal government has increased the price of petrol by Rs3.05 per litre and High-Speed Diesel (HSD) by Rs5.37 per litre on Thursday, with the revised rates taking effect from Friday, Sept 11.
Following the increase, petrol will cost Rs370.80 per litre while HSD will be sold at Rs398.04 per litre. The government continues to levy Rs114 per litre in taxes and duties on petrol and Rs100 per litre on diesel, according to the Petroleum Division’s notification.
The latest increase comes amidst skyrocketing global oil prices with Brent crude reaching $108 per barrel on Thursday for the first time since May as traders prepared for a potentially prolonged supply shock linked to the Iran war.
Brent, the global oil benchmark, rose as much as 7.1 percent before settling at $107.63, up 6.34 percent on the day. The settlement was the highest since May 19 and marked its biggest one-day increase in six weeks.
United States (US) crude also rose as much as 7.3 percent to reach $103 per barrel for the first time since May before easing slightly. It settled at $102.48, up 6.69 percent on the day, marking its highest settlement since May 19 and its biggest one-day jump in two months.
Oil prices have climbed back above $100 per barrel this week as fighting around the Strait of Hormuz and the Red Sea has intensified. The US and Iran have exchanged strikes, while Iran-backed Houthis have attacked Saudi Arabia, adding to tensions around the Bab al-Mandab Strait.
The developments have raised concerns among traders over a longer disruption to oil supplies as the conflict continues to affect key shipping routes.
In Pakistan, HSD had reached a peak of Rs520.35 per litre on April 3 before its price began to fall. Its price had started rising from Rs281 per litre after the US-Iran war broke out on February 28.
Petrol had also peaked at Rs458.41 per litre on April 3 after beginning its upward movement from Rs266 in the first week of March.
The government has been revising fuel prices based on international market movements. On July 17, Petroleum Minister Ali Pervaiz Malik announced that fuel prices would be fixed daily due to fluctuations in international market prices following renewed hostilities between Iran and the US.
Before the shift to daily pricing, the government had announced weekly fuel-price revisions since early March, alongside fuel-conservation measures over possible oil supply disruptions due to the conflict in the Middle East.
The federal government had also announced targeted relief measures in April to provide subsidised fuel.
Petrol is mainly used in private transport, small vehicles, rickshaws and two-wheelers, while HSD is mainly used in heavy transport, power plants and large generators.
Petrol and HSD are also major revenue earners, with monthly sales of about 700,000 to 800,000 tonnes compared with around 10,000 tonnes of monthly demand for kerosene.
