Govt cuts petrol by Rs5.16, diesel by Rs7.69 for Oct 20

Petrol price decreases to Rs381.14 per litre, while HSD will cost Rs389.27 under daily price mechanism

The federal government on Monday decreased the price of petrol and high-speed diesel (HSD) by Rs5.16 and Rs7.69 per litre, respectively, for October 20.

According to a notification issued by the Petroleum Division, the price of petrol was fixed at Rs381.14 per litre, while HSD would cost Rs389.27 per litre for Tuesday.

The latest revision comes after the government decreased the price of petrol by Rs3.93 per litre, while keeping the price of high-speed diesel (HSD) unchanged from October 17 to October 19.

Read: Govt cuts petrol by Rs3.93, keeps diesel unchanged till Oct 19

On July 17, the government announced a new pricing mechanism under which petroleum product prices would be reviewed and notified daily, 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.

On September 13, PM Shehbaz announced a special relief scheme offering Rs100 per litre off petrol for motorcycles, three-wheeler rickshaws and cars with engines up to 800cc, in an attempt to shield lower-income consumers from the impact of rising petroleum prices.

Under the proposal, an estimated 11.8 million beneficiaries would be covered. Around 10 million two-wheeler users and 800,000 three-wheeler users would be entitled to relief on 20 litres of fuel per month, translating into a maximum monthly benefit of Rs2,000 per beneficiary.

Another one million users of cars up to 800cc would receive relief on 30 litres per month, providing them with a maximum benefit of Rs3,000 each.

On Sept 17, the government reintroduced austerity and fuel conservation measures amid rising fuel prices, tightening business operating hours and restricting public events.

Under the measures, notified with immediate effect, shops, markets, shopping malls, bazaars, departmental stores, grocery stores, general stores and kiryana shops would close by 9pm throughout the week, according to a notification issued by the Cabinet Division.

Marriage halls, marquees and other commercial venues hosting festive events would close by 10pm, while restaurants, cafes, eateries, food outlets and standalone fruit and vegetable shops would be allowed to operate until 11pm. Takeaway and home delivery services would remain exempt from the timing restrictions.

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.

Brent crude futures rose slightly on Monday after attacks by Yemen's Iran-aligned Houthis on a Yemeni ‌military training camp and renewed attacks on Saudi energy, airport and military facilities.

Brent crude futures rose 17 cents, or 0.15%, to 110.03 a barrel at 1:08 pm ET (1708 GMT), after falling more than $3 earlier in the session as investors booked profits following last week's rally to a five-month high.

Yemen's Houthis said on Monday they had carried out attacks on Saudi energy, airport and military targets, ​including an Aramco facility in Yanbu, the Shaybah oilfield, King Khalid International Airport in Riyadh and Abha airport. Saudi authorities did not immediately confirm the claims, and ​Reuters could not independently verify them.

Separately, an oil tanker caught fire and exploded after striking a naval mine in the southern Strait of Hormuz on Sunday, Iran's Revolutionary Guards said, according to Iranian media.

"Ongoing strikes on vessels transiting the Strait of Hormuz and flows remaining below pre-conflict levels continue to support prices," UBS analyst ‌Giovanni Staunovo ⁠said.