Govt decreases petrol price by Rs1.70, hikes HSD by Rs1.39 for August 12
Newly increased fuel prices are displayed at a petrol pump in Malvan, India. PHOTO: REUTERS
The federal government on Tuesday decreased the price of petrol by Rs1.70 while hiking the price of high-speed diesel (HSD) by Rs1.39 per litre for August 12.
According to a notification issued by the Ministry of Petroleum, the price of petrol was fixed at Rs325.92 per litre, while HSD would now cost Rs382.25 per litre.
The latest revision comes a day after the government announced that fuel prices would remain unchanged for August 11, citing the non-publication of Platts prices on 10 August.
READ: No change in fuel prices for Aug 11
On July 17, the government introduced a daily fuel price review mechanism amid volatility in global oil prices following renewed hostilities in the Middle East.
The daily fuel prices are based on a seven-day average of international market rates to align with international standards.
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 gained, and global equities were higher on Tuesday with traders focused on as negotiations between the United States and Iran over a peace deal and the reopening of the Strait of Hormuz.
Brent crude futures rose 5% in the last two days alone, with the global benchmark last up 0.23% at $87.92. US crude gained 0.16% to $82.26.
"This is going to be almost a war of attrition now," said Tony Sycamore, a market analyst at IG.
"You probably can see the (oil) market sitting around the $75 to $95 range while we wait to see who blinks first."