Govt ups petrol price by Re0.88 per litre, high-speed diesel rate by Re0.53

On Tuesday, the government raised the price of petrol by Re0.88 per litre and high-speed diesel (HSD) by Re0.53 per litre. Consequently, petrol will now cost Rs382.02 per litre and HSD will amount to Rs389.80 per litre. The government retains a tax of Rs114 per litre on petrol and Rs100 per litre on diesel. According to the Petroleum Division's notification, these revised prices will take effect from October 21 (Wednesday).

The HSD price has since dropped from its April 3 peak of Rs520.35. It had commenced a price increase from Rs281 per litre following the February 28 US-Iran conflict. The petrol price peaked at Rs458.41 on April 3 after commencing an upward trend from Rs266 in early March. In response to escalating fuel costs due to the Middle East conflict, the government has implemented austerity measures.

These include markets closing by 9pm and a 50 percent reduction in fuel allocations for official vehicles for three months. On September 13, Prime Minister Shehbaz Sharif announced a "relief scheme" for motorcycle, auto, and 800cc vehicle users to mitigate the impact of rising global oil prices. Earlier, on July 17, Petroleum Minister Ali Pervaiz Malik announced that fuel prices would now be determined daily due to international market price fluctuations following renewed Iran-US hostilities.

Prior to this, the government had been weekly adjusting fuel prices since early March, alongside conservation measures amid potential oil supply disruptions due to the Middle East conflict. The federal government also introduced targeted fuel subsidies in April. The cabinet and prime minister decided to entrust the Oil and Gas Regulatory Authority (Ogra) with deciding daily fuel prices based on international market trends.

Petrol primarily fuels private transport, small vehicles, rickshaws, and two-wheelers, with price fluctuations affecting the middle and lower-middle classes. Diesel price changes impact the public broadly, as it's extensively used in heavy transport, power plants, and large generators. Petrol and HSD are the primary revenue generators, with monthly sales of about 700,000 to 800,000 tonnes, compared to the 10,000 tonnes monthly demand for kerosene.