Govt raises petrol price by Rs2.31 per litre, high-speed diesel rate by Re0.78 per litre

On Thursday, the government lifted petrol prices by Rs2.31 per litre and high-speed diesel (HSD) rates by Re0.78 per litre. Consequently, petrol will now be sold for Rs398.96 per litre, while HSD will cost Rs395.72 per litre. The state still collects Rs114 per litre in taxes and duties on petrol and Rs100 per litre on diesel. The new rates come into effect on October 9 (Friday), according to a notification from the Petroleum Division.

The HSD price has decreased from a record high of Rs520.35, set on April 3. Prices for HSD and petrol began to climb after the US-Iran war started on February 28. The petrol price peaked at Rs458.41 on April 3, following an upward trend that began in the first week of March. To tackle the rising fuel costs due to the ongoing Middle East conflict, the government has put in place new austerity measures.

Markets must close by 9pm, and fuel allocations for official vehicles have been slashed by 50% for a three-month period. Prime Minister Shehbaz Sharif also announced a "relief scheme" for motorcycle, auto, and vehicle owners up to 800cc to lessen the burden of escalating global oil prices. Earlier, on July 17, Petroleum Minister Ali Pervaiz Malik stated that fuel prices would now be decided daily due to fluctuations in international market prices following renewed tensions between Iran and the US.

Before this, the government had been announcing fuel prices weekly since early March, alongside conservation efforts amid potential oil supply disruptions resulting from the Middle East conflict. In April, the federal government also announced targeted relief measures to subsidize fuel. The Petroleum Minister stated that the cabinet and the prime minister decided to entrust the Oil and Gas Regulatory Authority (Ogra) with the responsibility of determining fuel prices daily based on international market trends.

Petrol is primarily used in private vehicles, small cars, rickshaws, and two-wheelers, and changes in its price impact the middle and lower-middle class. Similarly, fluctuations in diesel prices also affect the general public, as it is mainly utilized in heavy transport, power plants, and large generators. Petrol and high-speed diesel (HSD) are the primary sources of revenue, with monthly sales of around 700,000 to 800,000 tonnes, compared to only 10,000 tonnes of monthly demand for kerosene.