The federal government on Friday decreased petrol and diesel prices by Rs. 6 and Rs. 6.80/liter, respectively, while raising the price of kerosene oil.
In a notification, the Petroleum Division said new the fuel rates would come into effect from May 23. Under the weekly price review, the prices are anticipated to remain in place until May 30.
Following the announcement, the price of petrol now stands at Rs. 403.78/liter and high-speed diesel at Rs. 402.78/liter. However, the notification said the price of kerosene oil price had been increased by Rs. 1.71/liter and would now cost Rs. 313.44/liter.
This is the second consecutive decline in fuel prices. In last week’s review, the government had reduced the prices of petrol and diesel by Rs. 5/liter each.
Commuters are the primary consumers of petrol, i.e. small vehicles, rickshaws and two-wheelers, with higher prices posing the highest impact on the budgets of middle and lower-middle-class households. Diesel, meanwhile, is primarily utilized by the transport sector and hikes to its price are considered inflationary, leading to increased prices of vegetables and other food items.
Fuel prices in Pakistan have spiked over the past two months on the back of the Iran conflict triggered by joint U.S.-Israeli strikes on Tehran. Following the attacks, Iran blockaded the Strait of Hormuz, a vital shipping lane through which a fifth of the world’s oil and gas supplies pass.
In April, Islamabad hiked fuel prices by 43% for petrol and 55% for diesel. Ministers sought to dampen the sticker shock by announcing a targeted fuel subsidy program, though this did not apply to car owners. Subsequently, the government cut the petroleum levy by Rs. 80/litre and brought the price of petrol down to Rs. 378/liter.
However, citing IMF conditions, the government has once again upped the PDL, with overall taxes now comprising nearly a third of fuel prices in the country.