Shafaqna Pakistan: The federal government on Thursday increased the prices of petrol and high-speed diesel (HSD) by 45 paisas and Rs1.16 per litre, respectively, for August 14.
According to a notification issued by the Ministry of Petroleum, petrol will now cost Rs325.43 per litre, while the price of HSD has been set at Rs383.95 per litre.
The latest adjustment came a day after the government reduced the price of petrol by 94 paisas per litre and increased HSD by 54 paisas for August 13.
The government introduced a daily fuel price review mechanism on July 17 amid fluctuations in international oil prices following renewed hostilities in the Middle East.
Under the mechanism, domestic fuel prices are determined using a seven-day average of international market rates, in line with international pricing standards.
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, pressures 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.
Oil prices pared losses to less than 1% after dropping more than 3% earlier on Thursday, as reports that Yemen’s Houthis had targeted a Saudi Aramco refinery with drones renewed concerns over supply disruptions in an already tight global market.
The Houthis attacked an Aramco refinery in Saudi Arabia’s Jazan with two drones on Thursday, the Iran-aligned movement’s Saba News Agency reported.
Brent futures were down 74 cents, or 0.8%, at $88.24 a barrel at 11:58 am EDT (1558 GMT), while US West Texas Intermediate (WTI) crude was down 77 cents, or 0.8%, at $82.56.
Source: Express Tribune
