By Staff Reporter
KARACHI: Pakistan raised petrol and diesel prices for the second time in a month on Monday, driven by volatile global oil markets and Middle East tensions, even as international benchmarks softened.
The government increased petrol by Rs8.36 per litre and diesel by Rs10.39 per litre, effective through July 15, as global markets grapple with supply concerns.
In a late-night announcement, the Ministry of Finance said the Oil and Gas Regulatory Authority (Ogra) had reviewed and adjusted petroleum product prices due to “fluctuations in the international market.”
The ex-depot price of high-speed diesel (HSD) climbed 4% to Rs272.98 per litre from Rs262.59, while petrol rose 3.3% to Rs266.79 per litre from Rs258.43.
International oil prices edged lower on Monday as investors weighed easing Middle East risks and the prospect of an OPEC+ output increase in August. Brent and US crude benchmarks posted their steepest weekly drops since March 2023.
Still, Pakistan pinned the hikes on recent Israeli strikes on Iran, which have heightened fears of supply disruptions despite the short-term softening of global prices.
The price increases spell trouble for Pakistan’s economy, particularly its transport and agriculture sectors.
HSD fuels heavy transport vehicles, trucks, buses, and trains, as well as agricultural machinery like tractors, tube-wells, and threshers. Its Rs10.39 per litre jump is expected to drive up the cost of vegetables and other essentials, as transport fares rarely fall even when fuel prices dip.
Petrol, up Rs8.36 per litre, powers private cars, rickshaws, and two-wheelers, directly squeezing the budgets of middle- and lower-middle-class households. This marks the second hike since mid-June, when petrol rose Rs4.80 per litre and HSD climbed Rs7.95 per litre on June 16.
The government is collecting roughly Rs100 per litre in taxes on both petrol and HSD. That includes a new Rs2.5 per litre climate support levy, effective July 1, on top of a Rs78 per litre petroleum development levy (PDL) applied to petrol, diesel, and high-octane products.
A customs duty of about Rs19 per litre hits both fuels, whether locally produced or imported, while oil companies and dealers take Rs17 per litre in distribution and sale margins. General sales tax (GST) remains at zero. To make room for the carbon tax, the government tweaked the PDL downward.
Sources said the levy on petrol fell from Rs78.02 to Rs75.52 per litre, while HSD’s levy dropped from Rs77 to Rs74.51 per litre. The adjustments did little to offset the overall price rise at the pump.
In a rare bright spot, Ogra cut the price of liquid petroleum gas (LPG) by Rs7.51 per kg, or 3.1%, for July. The cost of an 11.8kg cylinder fell to Rs2,750.60 from Rs2,838.31 in June, a reduction of Rs88.71. Ogra tied the decrease to a 4.29% drop in the Saudi Aramco contract price, though a 0.47% rise in the US dollar exchange rate slightly blunted the relief.
The Finance Division said the price increases aligned with Ogra’s recommendations and input from relevant ministries, reflecting global market shifts. “The decision to increase the prices of petroleum products has been taken in line with the recommendations of Ogra and the relevant ministries,” the ministry stated.
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