Pakistan to Raise Petrol and Diesel Prices Amid Economic Strain
Petrol prices in Pakistan are poised for an increase as the nation grapples with severe economic challenges, influenced largely by a global surge in crude oil prices.
The impending rise in petroleum prices is attributed to escalating international costs linked to ongoing crises in the Middle East. Reports indicate that petrol prices have increased by approximately $2.80 per barrel over the past two weeks, while High-Speed Diesel (HSD) prices have surged by around $7 per barrel in the global markets. This fluctuation highlights Pakistan’s vulnerability, as the country remains heavily reliant on imported oil to meet over 79% of its energy needs.
The government’s decision to raise prices appears to be a direct response to these international market trends. The new pricing structure is expected to be announced on the eve of October 15, with adjustments taking effect the following day. According to sources, the central government may raise petrol prices by Rs5 per litre and diesel prices by Rs13 per litre.
In addition to the consumer price hikes, the profit margins for oil companies and petrol dealers are also set to increase. Reports suggest that the government may raise the profit margin for oil companies by Rs1.35, bringing it to Rs9.22 per litre. For petrol dealers, the proposed increase is Rs1.40, which would elevate their margin to Rs10.04 per litre.
Just two weeks prior, on October 1, the Pakistani government had reduced the price of petrol by Rs2.07 per litre, bringing it down from Rs249.10 to Rs247.03 per litre. Currently, petrol is priced at Rs247, while diesel stands at Rs259. In comparison, petrol and diesel prices in India average around Rs100 and Rs90, respectively.
The upcoming price hike is expected to place further economic strain on the middle and lower classes of Pakistan, already under pressure from inflation and rising costs of living. The volatility in international oil markets poses a significant risk to the country’s energy security, with past events such as the Suez Crisis, the Six-Day War, and the Iranian Revolution serving as historical reminders of the consequences of dependency on imported oil.
As the government prepares to announce the new prices, the impact on ordinary citizens and the broader economy is likely to be profound. The rising fuel costs will exacerbate existing challenges, particularly as the country contends with the effects of climate change and economic instability.