Fuel Costs Rise as Government Adjusts Petrol and Diesel Rates Amid Global Volatility

The government has announced an immediate increase in fuel costs, raising petrol by Rs5.44 and diesel by Rs31.05 per litre. These adjusted rates will remain in effect for three days, until July 20, as a measure to offset rising global prices and increased import premiums resulting from heightened regional tensions.

Under the new pricing structure, petrol is now priced at Rs316.15 per litre, while high-speed diesel (HSD) stands at Rs354.35 per litre.

According to a press release from the Petroleum Division, the revised rates are effective as of Saturday, July 18.

Diesel prices have seen a significant reduction from the Rs520.35 peak recorded on April 3, following a steady rise from Rs281 per litre after the outbreak of conflict between the US and Iran on February 28.

Petrol prices previously reached a high of Rs458.41 on April 3, following an upward trend that began from Rs266 in early March.

Petroleum Minister Ali Pervaiz Malik announced today that fuel pricing will transition to a daily frequency. This shift is a response to the rapid market fluctuations caused by renewed hostilities between Iran and the United States.

While the government has maintained weekly price revisions since March to manage potential oil supply disruptions in the Middle East, the decision to move to daily pricing follows cabinet and Prime Minister directives. The Oil and Gas Regulatory Authority (Ogra) has been tasked with determining daily rates based on international market trends.

The Minister further noted that Ogra will provide increased transparency by not only publishing the final fuel rates but also detailing the specific market factors that influenced each price change at the pump.

Currently, the government collects approximately Rs105 per litre on both fuel types through a combination of customs duties, petroleum levies, climate support levies, and inland freight equalization margins.

The shift to daily pricing has faced opposition from the All Pakistan Dealers Association, which is currently evaluating plans for protests next week.

Fluctuations in petrol prices heavily impact the middle and lower-middle classes, as the fuel is primarily used in private transport, rickshaws, and two-wheelers. Similarly, diesel price volatility affects the broader population, as it is the primary fuel for heavy transport, power plants, and large-scale generators.

Petrol and high-speed diesel remain the most significant revenue drivers for the sector, with monthly sales ranging between 700,000 and 800,000 tonnes, vastly outstripping the 10,000-tonne monthly demand for kerosene.

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