Pakistan is bracing for another surge in fuel costs, with petrol and diesel prices expected to increase in the coming days, while liquefied petroleum gas prices have already witnessed a sharp hike from April 1, adding further pressure on consumers and businesses.
The latest developments come amid rising global oil prices and ongoing economic strain linked to international geopolitical tensions, particularly in the Middle East.
Petrol, Diesel Prices Expected to Increase
According to a report by Dawn, petroleum product prices are likely to go up again within days as the government struggles to sustain heavy subsidies on fuel.
Officials have indicated that the current price freeze on petrol and high speed diesel cannot continue for long due to mounting fiscal pressure. The government has been absorbing significant costs to shield consumers, but this approach is becoming increasingly unsustainable.
Earlier, Prime Minister Shehbaz Sharif had rejected multiple recommendations to increase fuel prices, including proposals of up to Rs95 per litre for petrol and Rs203 per litre for diesel.
Despite these rejections, officials warn that delaying price adjustments could lead to a bigger shock later. One official told Dawn:
“You cannot postpone inflation artificially for long; the more you delay price adjustments, the greater pain you build for the future.”
Pakistan had already raised petrol and diesel prices by Rs55 per litre earlier in March due to global oil market pressures.
Global Factors Driving Fuel Prices
The expected increase is largely linked to rising international crude oil prices triggered by geopolitical tensions, particularly conflict involving Iran. Pakistan relies heavily on imported fuel, making domestic prices highly sensitive to global trends.
Experts say fluctuations in the US dollar exchange rate and international benchmark prices directly impact local fuel costs. With global markets still volatile, further increases appear likely in the short term.
LPG Prices Jump by Over 34% from April 1
While petrol and diesel prices are yet to be revised, the Oil and Gas Regulatory Authority has already notified a significant increase in LPG prices for April.
According to the notification reported by The Express Tribune:
- LPG price increased by Rs78.28 per kg
- New price set at Rs304.15 per kg
- 11.8kg domestic cylinder now costs Rs3,588.59, up by Rs923.71
- Overall increase stands at 34.66% compared to March
The producer price also rose sharply to Rs262,817 per tonne, reflecting global market trends.
Why LPG Prices Increased
OGRA attributed the increase to international factors, particularly a sharp rise in the Saudi Aramco Contract Price, which went up by around 44%, along with minor currency fluctuations.
The regulator also included marketing, distribution, and transportation margins, along with taxes such as GST and petroleum levy, in determining the final consumer price.
Impact on Households and Economy
The combined effect of rising LPG and expected petrol and diesel hikes is likely to significantly impact inflation:
- Transport costs may increase immediately
- Prices of essential goods could rise due to higher logistics costs
- Low and middle income households will face increased financial pressure
LPG is widely used in areas without piped gas supply, making the increase particularly burdensome for rural and lower income households.
A Growing Economic Challenge
Pakistan’s fuel pricing remains closely tied to global energy markets. While the government has attempted to cushion the impact through subsidies and delayed adjustments, experts warn that these measures cannot continue indefinitely.
With LPG prices already surging and petrol and diesel likely to follow, the coming weeks could bring another wave of inflation across the country.
