Pakistan’s fuel price hike deepened on Thursday as the government sharply raised petrol and diesel prices, citing the Middle East conflict and soaring global energy costs. Petroleum Minister Ali Pervaiz Malik said petrol will now cost Rs458.41 per litre after an increase of Rs137.23, while high-speed diesel will rise to Rs520.35 per litre after a jump of Rs184.49.
Speaking alongside Finance Minister Muhammad Aurangzeb, Malik said the worsening regional situation had pushed crude oil prices to record levels and disrupted supply routes linked to the Strait of Hormuz. He said the government had tried to limit the burden through austerity and spending cuts.
Global oil and energy markets have remained under severe pressure since the United States and Israel launched joint strikes on Iran on February 28, according to the source text. In response, Tehran effectively blocked the Strait of Hormuz and struck oil refineries across the Gulf, triggering a broader energy shock.
That disruption has driven countries to ration fuel and energy, while Pakistan has already introduced austerity and fuel conservation measures. The government had first raised petrol and diesel prices by Rs55 per litre on March 6, then kept prices unchanged in the previous three weekly reviews before this latest increase.
The government also raised kerosene oil prices by Rs34.08 per litre, taking the new rate to Rs467.48 per litre, according to an OGRA notification cited in the report. The source text notes that kerosene prices often track international market trends more closely than those of petrol and diesel, making kerosene more vulnerable to sudden increases.
At the same time, officials sharply increased the petroleum levy on petrol by Rs55.24 per litre to Rs160.61 per litre, while cutting the levy on high-speed diesel to zero. Sources quoted in the report said the move aims to meet revenue needs while easing some pressure on the transport and agricultural sectors, which rely heavily on diesel. [Internal link: how petroleum levy affects fuel prices]
Finance Minister Aurangzeb said the government will move away from blanket subsidies and instead focus relief on vulnerable groups. Under the new package, motorcyclists will receive a subsidy of Rs100 per litre on up to 20 litres of petrol each month.
He also announced a Rs100-per-litre diesel subsidy for intercity public transport and a monthly fuel subsidy of Rs70,000 for trucks and goods transport. In addition, the government plans to support railways so fares remain manageable and will review nationwide market timings to conserve fuel and cut electricity generation costs. [Internal link: government relief measures explained]
The Pakistan Business Forum criticised the increase in the petroleum levy, calling it unjustified under current economic conditions. The group urged Prime Minister Shehbaz Sharif to scrap the levy immediately, warning that higher fuel taxation would raise business costs and put more pressure on industry and consumers
