Shafaqna Pakistan: The federal government on Tuesday raised petrol and high-speed diesel (HSD) prices by Rs1.12 and Rs1.11 per litre, respectively, for the period from August 26 to August 27.
According to a notification issued by the Petroleum Division, petrol will now be priced at Rs343.10 per litre, while the rate of HSD has been set at Rs371.80 per litre until August 27.
The latest increase comes just a day after petrol and HSD prices were raised by 39 paisas and Rs2.40 per litre, respectively, for August 25.
The government introduced a revised petroleum pricing mechanism last month under which fuel prices are reviewed and notified on a daily basis instead of weekly. The change was introduced amid renewed US-Iran tensions, which have increased volatility in international oil markets and raised concerns over fuel supplies.
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 on Tuesday fell about 4% to a one-week low as traders shrugged off the latest US sanctions campaign against Iran, viewing economic pressure as posing less risk to oil supplies than a military escalation.
Brent crude futures were down $3.74, or 4.1%, at $88.43 a barrel by 2 pm ET (1800 GMT), while US West Texas Intermediate crude futures fell $2.85, or 3.4%, to $81.67, paring earlier losses.
The shift from military conflict to economic pressure in the US-Israeli war with Iran has reduced some of the oil market’s anxiety, said Saxo Bank head of commodity strategy Ole Hansen, adding the US sanctions announcement was not as forceful as some traders had expected.
Source: Express Tribune
