Petrol Price Set to Surge in Pakistan Amidst Global Market Volatility

As global tensions escalate following the recent Iran strike on Israel, Pakistan braces for a significant increase in petrol and diesel price expected to rise by Rs. 2.5 and Rs. 8.5 per liter respectively, effective April 15, 2024.

The decision, anticipated as the second consecutive hike under the current coalition government, comes against the backdrop of a volatile international oil market.

Despite the neutral reaction of the oil market to the Iran strike, international prices for petrol, high-speed diesel (HSD), and crude oil saw substantial spikes in the first week of April.

During this period, petrol and HSD prices surged by approximately $4 and $4.50 per barrel respectively.

Consequently, Pakistan is poised to witness petrol price reaching Rs. 291.91 per liter and HSD prices escalating to Rs. 294.06 per liter.

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While the surge in HSD prices is mirrored in the international market, the import premium paid by Pakistan State Oil remained constant at $6.50 per barrel, indicating stable import costs amid global fluctuations.

Global factors contributing to the tightening supply, including shipping delays in key regions like the Middle East, Europe, and Africa, have driven Brent crude futures and other physical markets to hover between $80-90 per barrel.

Despite the stability of the Pakistani rupee against the dollar, fluctuating global prices and supply chain disruptions continue to exert pressure on the domestic fuel market.

The looming hike in fuel prices underscores the challenges faced by governments worldwide in balancing economic stability with global market dynamics, leaving consumers bracing for the impact on their daily expenses.