Govt increases petrol by Rs4.42 per litre, HSD by Rs6.10 per litre amid rising global oil prices

The government raised the prices of petrol and high-speed diesel (HSD) by Rs4.42 and Rs6.10 per litre respectively on Monday, in response to escalating global oil prices. Under the new prices, petrol will be sold at Rs380.24 per litre and HSD at Rs409.42 per litre. The government maintains a tax of Rs114 per litre on petrol and Rs100 per litre on diesel.

The revised prices will take effect on September 15. The HSD price has dropped from its April peak of Rs520.35, which was recorded on April 3, a price that had begun to rise from Rs281 per litre following the onset of the US-Iran war on February 28. Prior to this, petrol prices peaked at Rs458.41 on April 3, after starting to climb from Rs266 in the first week of March.

On September 13, Prime Minister Shehbaz Sharif introduced a "relief scheme" aimed at easing the financial strain caused by rising global oil prices. According to the scheme, motorcycle and auto owners, as well as drivers of vehicles up to 800cc, will receive a monthly subsidy of Rs100 and Rs150 per litre respectively. On July 17, Petroleum Minister Ali Pervaiz Malik announced that fuel prices would now be determined on a daily basis due to the volatility in international market prices, following renewed tensions between Iran and the US.

Previously, fuel price revisions had been announced on a weekly basis since early March, alongside initiatives to conserve fuel in anticipation of potential supply disruptions resulting from the Middle East conflict. In April, the federal government also unveiled targeted relief measures, entrusting the Oil and Gas Regulatory Authority (Ogra) with the responsibility of determining fuel prices daily based on international market trends.

Petrol is primarily utilized in private vehicles, small vehicles, rickshaws and two-wheelers, with price fluctuations affecting the middle and lower-middle classes. Similarly, changes in diesel prices impact the general public, as it is predominantly used in heavy transport, power generation, and large generators. Petrol and HSD are the primary sources of revenue, with monthly sales ranging from 700,000 to 800,000 tonnes for petrol and 10,000 tonnes for HSD, compared to a monthly demand of just 10,000 tonnes for kerosene.