Govt cuts petrol by Rs1.60, increases diesel by 1.64 paisas for Oct 23

Petrol price decreases to Rs377.71 per litre, while HSD will cost Rs391.75

The federal government on Thursday decreased the price of petrol by Rs1.60 per litre while increasing the price of high-speed diesel (HSD) by Rs1.64 per litre for October 23.

According to a notification issued by the Petroleum Division, the price of petrol was fixed at Rs377.71 per litre, while HSD would cost Rs391.75 per litre for Friday.

The latest revision comes a day after the government decreased the price of petrol by Rs2.71 per litre while increasing the price of diesel by 31 paisas per litre, for October 22.

Read: Oil jumps on escalating Middle East conflict

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.

Also Read: Govt mulls $2b LNG import decision

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 climbed about ​3% to a five-month high on Thursday after Houthi attacks in Saudi Arabia stoked concerns of further disruption to energy ‌supplies from the key exporting region.

Brent futures rose $3.51, or 3.2%, to $112.33 a barrel at 1:05 p.m. EDT (1705 GMT), while US West Texas Intermediate crude rose $2.14, or 2.2%, to $99.29.

"Reports ​of Middle East crude oil exports exceeding pre-conflict levels are more than countered by attacks on ships in the Strait of Hormuz and the ​Houthi strikes on Saudi Arabia and on its oil infrastructure," PVM Oil analyst Tamas Varga said.

Morgan Stanley analysts estimated that Middle East crude oil exports were around 17 million barrels per day last week. Crude exports from the region averaged about 18 million bpd in the 12 months before the start of the Iran ​war, according to Kpler.