Tag: petrol prices

A review of the petroleum supply situation on Tuesday showed that fuel cargoes for March and April have largely been secured, while authorities continued discussions on managing demand and introducing conservation measures amid global energy pressures.

The assessment took place during meetings of the Committee to Monitor Petrol Prices, chaired by Finance Minister (FM) Muhammad Aurangzeb, where officials examined stock levels, import arrangements and international market trends following the Eid holidays.

According to the finance ministry, participants were informed that cargo inflows were continuing as scheduled and that petrol shipments for March and April had “largely been secured”, with additional cargoes planned to strengthen supply buffers.

Officials maintained that overall inventories remained at comfortable levels, supported by import arrangements and domestic production. They pointed out that supply chains from ports to refineries, storage facilities and retail outlets were functioning in an orderly manner.

The committee reviewed stock availability of crude oil and refined products across the supply chain, while refineries were reported to be operating at regular production levels. Authorities stated that efforts were under way to maintain throughput and ensure processing of incoming crude despite changing global conditions.

Alongside supply, the government also examined demand-side measures. Reports quoted sources that the federal government is working on a digital rationing system for petroleum distribution through a mobile application. Under the proposal, citizens would register their vehicles and identity details, with fuel quotas allocated based on need and availability, allowing access to a fixed daily supply of petrol or diesel.

Officials also discussed involving provinces in subsidy arrangements, with plans for the prime minister to consult the president on sharing the financial burden as part of broader pricing adjustments.

At the provincial level, Sindh Local Government Minister Nasir Hussain Shah said the government was considering a “smart lockdown” to conserve fuel in response to the global oil situation. He stated that austerity measures had already reduced fuel allowances for official vehicles by 60 percent and urged citizens to limit unnecessary travel.

At the federal level, measures introduced earlier include cuts in fuel allocations for government vehicles and adjustments in public sector work routines, along with calls for conservation to avoid supply disruptions.

During the meeting, officials also briefed participants on international energy markets and emerging price trends, outlining their possible impact on domestic pricing.

Chairing the session, Aurangzeb said that planning, procurement strategies and coordination had helped maintain supply stability despite global volatility. He directed relevant authorities to continue monitoring international developments, stock levels and supply chains.

He reiterated that uninterrupted availability of petroleum products remains a priority and called for continued coordination to maintain market stability.

Officials also noted that fuel consumption has increased despite rising prices, which they said supports the case for tighter management measures, including quota-based distribution and conservation steps.

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The meeting was attended by Power Minister Awais Leghari, Food Security Minister Rana Tanveer Hussain, Maritime Affairs Minister Junaid Chaudhary, Minister of State for Finance Bilal Azhar Kayani and senior officials from relevant ministries.

Pakistan raised petrol and high-speed diesel prices by an unprecedented Rs55 per litre on Friday, citing pressure on global oil markets following the war involving Iran, the United States (US) and Israel. The increase came hours after Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb said that petroleum reserves were sufficient and the situation remained under control.

Petroleum Minister Ali Pervaiz Malik announced the increase at a press conference alongside Deputy Prime Minister and Foreign Minister Ishaq Dar and Finance Minister Muhammad Aurangzeb. Dar said that the revised prices would take effect from Saturday.

Under the revision, the ex-depot price of petrol has been increased to Rs321.17 per litre from Rs266.17, while high-speed diesel has been set at Rs335.86 per litre, up from Rs280.86.

The government also adjusted the petroleum development levy. The levy on petrol was increased by Rs20 to about Rs105 per litre, while the levy on high-speed diesel was reduced from Rs77 to Rs57 per litre.

Before the new prices took effect, long queues formed at petrol pumps across several cities as motorists rushed to buy fuel at the previous rates. According to the reports from different parts of the country, some fuel stations stopped sales before midnight.

The announcement triggered heated reactions online, with users questioning the decision.

“When there was a stockpile for 28 days, they would give it to the poor public at the old rate; perhaps Allah Almighty would have improved the situation,” one user wrote. Another user said that the government had added pressure on citizens. “Instead of reducing taxes, they’ve placed even more burden on the public.”

At the press conference, Malik said that the regional conflict had created uncertainty in energy markets.

“The fire that started in a neighbouring country has spread across the entire region. We do not know how long this crisis will continue, and there is no clear timeline for its end,” he said.

He said that Pakistan depended on oil shipments passing through the Strait of Hormuz, which had been affected by the conflict. Malik said two vessels of the Pakistan National Shipping Corporation were travelling through Yanbu and Fujairah to maintain supplies.

According to the reports, US crude oil futures climbed more than 12 percent on Friday to above $90 per barrel, while Brent crude rose about eight percent to $92 per barrel.

Malik said that the government would review petroleum prices on a weekly basis as changes in the international market turn volatile. 

“As soon as the situation improves internationally, we will reduce prices at the same speed,” he promised. 

Dar said that global oil prices had increased by 50 to 70 percent during the crisis.

“In many countries, prices increase automatically, but we tried to pass on the minimum possible impact to consumers and find a balanced solution,” he said.

Despite the explanation from officials, criticism continued online.

“Remember that time? When petrol at 150 rupees crashed down on the country like ‘Doomsday’? Today petrol is 321 rupees, but there is silence,” one user wrote. 

Another reaction said: “Instead of increasing petroleum products by 55 rupees, if the government were to add 2 rupees to its own dignity, it would have been better.”

One user wrote: “Shame on all those who are oppressing the poor masses while the entire elite band together to take all the free petrol.” 

Another reaction questioned the policy response, saying: “If fuel prices increased in Pakistan due to war, then why didn’t they increase in India? If India buys from Russia, why can’t Pakistan?”

Earlier in the day, the government decided to defer a national action plan that included work-from-home arrangements and distance learning to conserve fuel.

A meeting on petroleum product reserves chaired by Prime Minister Shehbaz Sharif decided the measures would not be implemented for at least a week as current petroleum reserves were sufficient to meet demand.

Separately, the Punjab government directed deputy commissioners across the province to launch a crackdown against the hoarding of petroleum products following instructions from the federal government.

The federal government has increased the prices of petrol and high-speed diesel (HSD) for the remainder of February, citing changes in international market prices. According to a notification issued on Sunday, petrol prices were raised by Rs5 per litre, while HSD prices went up by Rs7.32 per litre. 

The revision was made following recommendations from the Oil and Gas Regulatory Authority (Oil and Gas Regulatory Authority) and in line with movements in global oil markets, the Petroleum Division said.

With the latest increase, the price of HSD now stands at Rs275.70 per litre, up from Rs268.38 per litre, reflecting an increase of 2.7 per cent for the current fortnight. HSD is widely used in the transport and agriculture sectors, including trucks, buses, trains, tractors, tube-wells and threshers, and its price has a bearing on the cost of transporting goods and agricultural output.

The price of petrol has been revised to Rs258.17 per litre from Rs253.17 per litre, an increase of 2 per cent. Petrol is mainly used in private vehicles, motorcycles, rickshaws and small transport, with a direct impact on household transport expenses.

The government is currently charging around Rs105 per litre on petrol and about Rs97 per litre on diesel in the form of taxes and levies. 

Petrol and HSD remain the government’s primary revenue-generating petroleum products, with combined monthly sales averaging between 700,000 and 800,000 tonnes. In comparison, monthly demand for kerosene stands at around 10,000 tonnes.

During FY2025, the government collected approximately Rs1.161 trillion through petroleum levy. For the current fiscal year, revenue from petroleum levy is projected to rise by around 27 per cent to Rs1.470 trillion.

Petrol and other petroleum products may become cheaper from January 1, 2026, following a decline in international crude oil prices. Officials say a plan has been prepared to reduce rates for the first fifteen days of the month.

Petrol prices are expected to fall by up to Rs10.60 per litre, while high-speed diesel could decrease by up to Rs8.59 per litre. 

Kerosene oil may drop by Rs8.92 per litre, and light diesel oil by Rs6.62 per litre.

If the plan is approved, petrol would cost around Rs252.85 per litre, down from Rs263.45. High-speed diesel would fall to approximately Rs257.06 per litre from Rs265.65, and kerosene oil could decrease to Rs171.62 from Rs180.54.

Officials say the revisions are part of measures to align domestic prices with the drop in international crude oil rates. The reduced rates will apply for the first half of January, after which prices may be reviewed again.

After two weeks of reduced petroleum product prices, the same are likely to increase by up to Rs2.34 per litre starting November 1, reports said.

According to reports, the potential spike is expected amid volatility in the international oil market and the impact of recent United States (US) sanctions on Russia’s top oil producers.

Preliminary estimates for the first 12 days of the current pricing cycle suggest petrol prices may rise by Rs1.48 per litre while high-speed diesel (HSD) could go up by Rs1.38 per litre.

Kerosene oil is likely to see a sharper increase of Rs2.34 per litre whereas light diesel oil (LDO) may edge higher by Rs0.49 per litre.

If these trends continue, the new consumer prices from November 1 are projected to be Rs264.50 per litre for petrol, Rs276.80 for diesel, Rs184.05 for kerosene and Rs163.25 for LDO.

Reports said that final price adjustments will be announced on the evening of October 31, after a review of the complete fortnight’s import and exchange rate data.

It may be noted that petrol prices last changed in mid-October when the government announced a downward revision, providing some relief to consumers amid easing global oil rates and a relatively stable rupee.

According to a notification issued by the Ministry of Finance, the price of petrol was reduced by Rs5.66 per litre while HSD was cut by Rs1.39 per litre.

The new rates came into effect on October 16, following which a modest reduction in transport and commodity costs was reported.

Prices for petroleum products are expected to rise for the next two weeks by approximately Re1 to Rs5 per litre. Reports cite a spike in international oil prices as the primary factor behind the projected increase in domestic petroleum products’ prices.

Escalating tensions between Iran and Israel have led to an eight percent jump in the price of oil. Analysts fear that Israel could target Iran’s oil facilities, resulting in subdued production levels.

Reports indicate that Iran pumps out 3.3 million barrels per day, exporting over 60 percent of its total production. Moreover, the war could spread to the Strait of Hormuz, which witnesses the transport of 20 percent of the world’s oil supply, including exports from non-belligerent countries such as Kuwait, Iraq, and the United Arab Emirates (UAE).

The aforementioned developments are expected to push the ex-depot price of petrol by Re1 per litre in the domestic market. Moreover, high-speed diesel (HSD) prices may witness a more liberal rise, with analysts predicting an increase of Rs5 per litre. 

The ex-depot price of petrol is projected to rise to Rs253.63 after the increase. Similarly, HSD prices are expected to rise too, coming to settle at Rs259.64 per litre.

It merits a mention that these are estimates, and the true magnitude of changes in fuel prices will only be revealed once the relevant authorities make a decision.

Aside from the base price of the fuel itself, Islamabad charges approximately Rs78 per litre petroleum development levy (PDL) on high octane and petrol. However, the PDL on HSD sits at a slightly lower Rs77.01 per litre.

The federal government extracts an additional Rs16 per litre from the sale of petroleum products by levying customs duty on petrol and HSD. Put together, the PDL and customs duty raise the federal government’s revenues to Rs94 per litre from petrol and HSD sales. 

A rise in HSD rates could detrimentally impact the transport sector, given the sector’s reliance upon HSD. The rise in HSD prices is likely to stifle economic activity across various sectors. 

For instance, the transportation sector has diesel as a primary input and thus requires vast quantities of the commodity. With a rise in HSD prices, these businesses could witness a rise in operational costs and, ultimately, a drop in profit margins.

As per analysts, bus fares tend to be sticky when diesel rates drop after an increase. As such, future drops in the price of diesel might not result in a proportional decrease in fares.

Consumers already grappling with the burdens of inflation may soon face another blow as reports indicate an imminent hike in petroleum prices within the country.

Recent assessments suggest a potential increase in petrol prices by over Rs9 per liter commencing April 1. This surge could propel the new price range for petrol from Rs279.75 to Rs289.25.

Furthermore, there are indications that the government is contemplating raising the petroleum levy from Rs60 to Rs100.

The petroleum development levy has undergone various adjustments in recent fiscal years, witnessing a notable escalation during FY-2023.

Sources reveal that the federal government is deliberating a proposal to either subject petroleum to General Sales Tax (GST) or elevate the existing levy rate to fulfill IMF requisites for reinstating an 18 per cent GST on petrol.

The proposed budget for the upcoming financial year outlines plans to increase the petroleum levy from Rs60 to Rs100 per liter.

Presently, a levy of Rs60 per liter is imposed on both petrol and diesel, yielding an estimated annual revenue of Rs950 billion. Since March 2022, GST on petroleum products has been maintained at zero levels.

In the initial budget drafts, GST was slated to be set at 18 per cent, in alignment with International Monetary Fund stipulations calling for the restoration of the standard GST rate.

On March 15, the government opted to maintain the price of petrol while reducing the cost of high-speed diesel by Rs1.77 per litre.

Petrol prices, fuel prices, government policy, petroleum levy, inflation, consumer concerns,