Fuel Prices Hiked Amid Regional Tension, LPG Price Slashed

ISLAMABAD, July 1 – The Pakistani government on Monday announced a sharp increase in petrol and diesel prices for the next fortnight, while simultaneously cutting the price of liquefied petroleum gas (LPG). In a late-night announcement, the Ministry of Finance said the Oil and Gas Regulatory Authority (OGRA) had revised petroleum prices based on global market trends.

Petrol prices have been raised by Rs8.36 per litre, bringing the new ex-depot rate to Rs266.79, while high-speed diesel (HSD) saw a steeper increase of Rs10.39 per litre, reaching Rs272.98. The adjustments reflect a 3.3% and 4% hike, respectively.

The diesel price hike is expected to have a broad inflationary impact, as HSD powers heavy transport, agricultural machinery, and public transit. Petrol, used primarily by private vehicles, motorcycles, and rickshaws, will hit middle- and lower-income households the hardest.

Despite zero general sales tax on petroleum products, the government is currently levying around Rs100 per litre in taxes, including a Rs78 petroleum development levy and a newly introduced Rs2.5 climate support levy, effective from July 1. Additional charges include Rs19 per litre in customs duties and Rs17 per litre in distribution and dealer margins.

LPG Prices Reduced

In contrast to rising fuel prices, OGRA announced a 3.1% cut in the price of LPG for July. The new consumer rate is set at Rs2,750.60 for an 11.8kg cylinder, down from Rs2,838.31 in June.

The reduction is attributed to a 4.29% decline in the Saudi Aramco contract price (CP), though a slight 0.47% uptick in the dollar exchange rate moderated the overall decrease. The net result is a Rs88.71 drop per domestic cylinder.

The fuel price adjustments come amid growing economic pressure and regional instability, with further changes likely if tensions in the Middle East persist.