ISLAMABAD: The Government of Pakistan significantly increased the petroleum levy on petrol from Rs106 to Rs161 per litre, marking a sharp rise of Rs55. As a result, petrol prices climbed to Rs458.40 per litre, intensifying pressure on consumers already facing high inflation.
Meanwhile, authorities abolished the levy on high-speed diesel (HSD), retaining only a Rs2.5 per litre carbon charge. Petroleum Minister Ali Pervaiz Malik said the government took the step after failing to persuade the International Monetary Fund to allow higher fuel subsidies beyond the capped limit of Rs152 billion.
Furthermore, this marks the second major fuel price hike in less than a month. Consequently, cumulative increases have reached 63 percent for petrol and 75 percent for diesel, raising concerns about the broader economic impact.
In addition, Ali Pervaiz Malik and Finance Minister Muhammad Aurangzeb announced the revised rates in a pre-recorded video. They attributed the surge to external factors, particularly Iran’s closure of the Strait of Hormuz, which disrupted global oil supplies.
Prices of other fuels also rose sharply. Kerosene oil increased to Rs 468 per litre, while light diesel oil reached Rs 395 per litre. As a result, transportation and commodity costs are expected to rise further.
Ultimately, the latest decision underscores the government’s limited fiscal space and reliance on international financial conditions. Observers warn that continued increases in fuel prices could exacerbate inflation and add to the financial burden on households nationwide.
