Pakistan’s fuel crisis deepens as another price hike looms amid global oil surge: Report

Pakistan is gearing up for another fuel price hike as the nation grapples with severe economic challenges. The impending rise in petrol and diesel prices comes in the wake of escalating global crude oil rates, as reported by The Tribune.

The increase in petroleum prices is primarily driven by the soaring international market rates, exacerbated by the ongoing crisis in the Middle East. Pakistan’s reliance on imported oil, coupled with rampant smuggling and illegal trade, has left the country vulnerable, with limited control over its energy security, the report added.

Over the past two weeks, international prices for petrol have surged by about $2.80 per barrel, while high-speed diesel (HSD) prices have spiked by approximately $7 per barrel, according to The Tribune.

In response, the Pakistani government is expected to announce a petrol price increase of ₹5 per litre and a diesel price hike of ₹13 per litre on October 15, which will come into effect the following day. Local media reports also suggest the government might raise the profit margin for oil companies by Rs1.35, bringing their share to Rs9.22 per litre, while petrol dealers may see their margin rise by Rs1.40 to Rs10.04 per litre, as reported by ARY News.

This marks a sharp turnaround from October 1, when the government slightly reduced petrol prices by Rs2.07 per litre, lowering the rate to Rs247.03 from Rs249.10, as per a report by ANI.

Oil and gas constitute a significant portion of Pakistan’s energy consumption, accounting for over 79% of its energy needs. According to government sources, the country remains heavily dependent on oil imports, making it vulnerable to global market fluctuations. Historical events, such as the Suez Crisis, the Six-Day War, and the Iranian Revolution, have all underscored Pakistan's susceptibility to oil supply disruptions, the ANI reported.

Currently, the international price of petrol hovers around $79 per barrel, a jump from $76 per barrel, while HSD has risen from $80.50 to $87.50 per barrel in recent weeks. In Pakistan, petrol is currently priced at Rs247 per litre, with diesel at Rs259 per litre, a stark contrast to neighbouring India, where petrol and diesel prices average Rs100 and Rs90, respectively, as per ANI.