The Government of Pakistan has announced a massive increase in petroleum prices, pushing the cost of fuel to unprecedented levels in response to an intensifying global energy crisis. Petroleum Minister Ali Pervaiz Malik, in a high-level press conference alongside Finance Minister Muhammad Aurangzeb, confirmed that the price of petrol has been raised to Rs458.4 per litre, while high-speed diesel has climbed to Rs520.35 per litre. This adjustment, effective immediately, follows a period of extreme volatility in international oil markets triggered by the spillover effects of regional conflicts in the Middle East.
The new pricing structure reflects a significant jump, with petrol increasing by Rs137.24 per litre and diesel by Rs184.49 per litre. Kerosene oil, often used by lower-income households, did not escape the upward trend, rising by over Rs34 to settle at Rs457.80 per litre. Minister Malik explained that these “difficult and responsible” decisions were necessitated by the record-high crude oil prices in Dubai and Oman markets, where Pakistan sources the vast majority of its energy supplies. With international crude and diesel benchmarks crossing the $250 mark, the government stated it could no longer maintain previous price levels without risking national economic stability.
To shield the most vulnerable segments of society from this inflationary shock, Finance Minister Muhammad Aurangzeb unveiled a comprehensive targeted subsidy programme. Under this initiative, motorcyclists will receive a subsidy of Rs100 per litre, capped at 20 litres per month for the next quarter. This move marks a shift away from blanket subsidies toward a more focused fiscal approach. Additionally, the agriculture sector, which remains a cornerstone of the national economy, will receive support through a one-time subsidy of Rs1,500 per acre for small farmers to ensure food security is not compromised by rising input costs.
The logistics and transport sectors are also set to receive substantial direct support to prevent a massive surge in the cost of essential goods. The Finance Minister announced a Rs100 per litre subsidy for high-speed diesel used in inter-city and goods transport. Specifically, trucks responsible for moving the majority of the country’s food items will receive Rs70,000 in monthly support, while larger transport vehicles and public service buses will be eligible for up to Rs100,000 per month. These measures are intended to keep public transport fares and food prices as stable as possible during this period of global supply chain disruption.
Minister Malik highlighted that the government had previously attempted to absorb these costs, rejecting multiple recommendations for even higher increases over the past month. He noted that the federal government had spent approximately Rs129 billion since early March to protect the public from the full impact of global market surges. However, the disruption of traffic in the Strait of Hormuz has forced the state to seek alternative, more expensive supply lines. Despite these challenges, the minister assured that timely procurement decisions have prevented any physical shortage of fuel within the country.
The briefing concluded with a call for national discipline and unity as the country navigates these external shocks. Minister Aurangzeb mentioned that further consultations with provincial governments would take place next week to advise on revised market timings and other energy-saving protocols. While acknowledging the hardship these prices bring, the leadership emphasized that maintaining international agreements and fiscal discipline is vital to preventing a broader economic collapse. The government remains committed to reviewing these prices and subsidies regularly as the geopolitical situation in the Middle East evolves.
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