Petrol price falls to Rs342.02 per litre, while HSD will cost Rs371.44 for the next three days, effective Aug 29
A worker holds a fuel nozzle to fills fuel in a car at petrol station in Karachi on September 16, 2023. Photo: REUTERS/ File
The federal government on Friday reduced the price of petrol and high-speed diesel (HSD) by 58 paisas and 17 paisas per litre, respectively, for the next three days, effective from August 29.
According to a notification issued by the Petroleum Division, the price of petrol was fixed at Rs342.02 per litre, while HSD would cost Rs371.44 per litre from August 29 till August 31.
The latest revision comes a day after the government reduced the prices of petrol and HSD by 50 paisas and 19 paisas per litre, respectively, for August 28.
Read: Govt decreases petrol price by 50 paisas, high-speed diesel by 19 paisas for August 28
Last month, the government announced a new pricing mechanism under which petroleum product prices would be reviewed and notified on a daily basis, replacing the weekly pricing mechanism, as renewed tensions between the United States and Iran continued to drive volatility in global oil markets and raise concerns over fuel supplies.
According to the Pakistan Economic Survey 2024-25, petroleum products constitute one of the country’s largest import categories, making the economy highly vulnerable to changes in global crude oil prices. Domestic refineries satisfy only part of national demand, while the remainder is met through imports of crude oil and refined petroleum products. Consequently, every increase in international oil prices raises Pakistan’s import bill, pressures foreign exchange reserves, and contributes to inflation.
Pakistan previously exercised significant government control over petroleum pricing through subsidies and administrative interventions. While these measures temporarily protected consumers, they imposed substantial fiscal costs. During periods of elevated global oil prices, successive governments delayed passing price increases to consumers, creating financial pressures for oil marketing companies, refineries, and the national budget. Large fuel subsidies widened fiscal deficits, increased public borrowing, and weakened macroeconomic stability.
Global geopolitical developments continue to pose significant risks. International oil prices are influenced by decisions taken by OPEC+, conflicts in the Middle East, sanctions on oil-producing nations, and disruptions in critical shipping routes such as the Strait of Hormuz and the Red Sea. Any interruption in these supply chains can immediately increase crude oil prices and freight costs. Since Pakistan imports the majority of its petroleum requirements, these developments quickly translate into higher domestic fuel prices.
Oil prices fell on Friday, on track for a weekly drop as traders evaluated hints about the US Federal Reserve Bank’s inflation-fighting policy and rumours of a possible agreement on shipping through the Strait of Hormuz.
Brent crude futures were down 38 cents or 0.42% at $89.32 a barrel at 10:54 am CDT (1654 GMT). West Texas Intermediate crude futures fell 36 cents, or 0.43%, to $83.17.
“The (global) products markets are looking strong on further Ukraine strikes on Russian refineries,” said Phil Flynn, senior analyst at the Price Futures Group. “But there is a lot of rumbling, rumours we might see a deal to reopen the Strait of Hormuz over the weekend.”
