Shafaqna Pakistan: The federal government on Tuesday announced a reduction in fuel prices, cutting the rates of petrol and high-speed diesel (HSD) by Rs3.39 and Rs4.07 per litre, respectively, effective August 5.
According to a notification issued by the Ministry of Petroleum, the new price of petrol has been set at Rs328.56 per litre, while HSD will now be sold at Rs385.86 per litre.
The latest adjustment follows a similar reduction announced a day earlier, when petrol prices were lowered by Rs4.08 per litre and HSD by Rs2.45 per litre for August 4.
The government introduced a daily fuel price review mechanism on July 17 in response to fluctuations in global oil markets triggered by renewed tensions in the Middle East.
Under the new system, fuel prices are calculated using a seven-day average of international oil prices to bring Pakistan’s pricing mechanism in line with international practices.
According to the Pakistan Economic Survey 2024-25, petroleum products constitute one of the country’s largest import categories, making the economy highly vulnerable to changes in global crude oil prices. Domestic refineries satisfy only part of national demand, while the remainder is met through imports of crude oil and refined petroleum products. Consequently, every increase in international oil prices raises Pakistan’s import bill, exerts pressure on foreign exchange reserves, and contributes to inflation.
Pakistan previously exercised significant government control over petroleum pricing through subsidies and administrative interventions. While these measures temporarily protected consumers, they imposed substantial fiscal costs. During periods of elevated global oil prices, successive governments delayed passing price increases to consumers, creating financial pressures for oil marketing companies, refineries, and the national budget. Large fuel subsidies widened fiscal deficits, increased public borrowing, and weakened macroeconomic stability.
Global geopolitical developments continue to pose significant risks. International oil prices are influenced by decisions taken by OPEC+, conflicts in the Middle East, sanctions on oil-producing nations, and disruptions in critical shipping routes such as the Strait of Hormuz and the Red Sea. Any interruption in these supply chains can immediately increase crude oil prices and freight costs. Since Pakistan imports the majority of its petroleum requirements, these developments quickly translate into higher domestic fuel prices.
Source: Express Tribune
