Govt increases diesel price by Rs2.24, decreases petrol's by 75 paisas

Pakistan's government has adjusted fuel prices, raising the cost of high-speed diesel (HSD) by Rs2.24 per liter to Rs390.62, while marginally reducing petrol prices by Rs0.75 to Rs335.06 per liter. These new prices took effect on July 30.

In a significant policy shift, fuel prices will now be determined on a daily basis. This change stems from the volatility in international market prices, particularly following renewed hostilities between Iran and the United States. Previously, the government had implemented weekly revisions for fuel prices since early March, coinciding with measures to conserve fuel amid potential oil supply disruptions due to the Middle East conflict.

The decision for daily pricing, announced by Petroleum Minister Ali Pervaiz Malik, was met with rejection by the All Pakistan Dealers Association. The association indicated plans to consider a protest against this new pricing mechanism.

Diesel prices have seen a decrease from a peak of Rs520.35 on April 3, having risen from Rs281 per liter after the US-Iran war began on February 28. Similarly, petrol prices peaked at Rs458.41 on April 3, after starting their ascent from Rs266 in early March. The government had previously introduced targeted relief measures, including subsidized fuel, in April.

Petrol is primarily used in private vehicles, rickshaws, and two-wheelers, affecting the middle and lower-middle classes. Diesel's impact is broader, as it fuels the heavy transport sector, power plants, and large generators. Both petrol and HSD are crucial for government revenue, with monthly sales ranging between 700,000 and 800,000 tonnes, significantly higher than the 10,000 tonnes of kerosene demand.

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fuel prices would now be fixed on a daily basis due to fluctuations in international market prices following renewed hostilities between Iran and the US.