Petrol prices in Pakistan are poised for an increase as the nation grapples with severe economic challenges. The anticipated rise in fuel costs is attributed to a surge in global crude oil prices, primarily influenced by the ongoing crisis in the Middle East.
The situation is exacerbated by rampant smuggling and illegal trade, leaving the country dependent on international players for energy security. Over the past two weeks, international petrol prices have risen by approximately $2.80 per barrel, while high-speed diesel (HSD) prices have surged by around $7 per barrel.
In response to these global market trends, the central government of Pakistan is expected to raise petrol prices by ₹5 per litre and diesel prices by ₹13 per litre. These new rates are anticipated to be announced on the evening of October 15 and will take effect the following day, as reported by various Pakistani media outlets.
Additionally, the government is likely to increase the profit margin for oil companies by ₹1.35, elevating it to ₹9.22 per litre. Petrol dealers could see a proposed margin increase of ₹1.40, bringing their profit to ₹10.04 per litre.
This forthcoming price adjustment follows a slight reduction earlier this month when, on October 1, the government decreased petrol prices by ₹2.07 per litre, lowering rates from ₹249.10 to ₹247.03 per litre.
Oil and gas account for over 79% of Pakistan’s energy mix, highlighting the country’s heavy reliance on imported oil. Consequently, fluctuations in the international market pose significant risks for oil supply disruptions. Historical precedents, such as the Suez Crisis in 1956, the Six-Day War in 1967, the Iranian Revolution in 1979, and the Gulf Crisis, underscore the volatility of Pakistan’s energy security.
The average international price of petrol has increased to nearly $79 per barrel, up from around $76 per barrel, while HSD prices have risen from approximately $80.50 per barrel to about $87.50 per barrel in the same timeframe.
Currently, the price of petrol in Pakistan stands at ₹247 per litre, while diesel is priced at ₹259 per litre. In comparison, petrol and diesel prices in India average ₹100 and ₹90, respectively.
The impending price hikes are expected to have a significant impact on the middle and lower classes in Pakistan, which is already facing pressures from climate change and economic volatility. As fuel prices rise, citizens are likely to experience increased financial strain in the coming months.
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