Pakistan petrol price climbed to Rs398.96 per litre on Friday, October 9, leaving it just Rs1.04 short of the Rs400 mark. The government raised petrol by Rs2.31 and high-speed diesel by 78 paisas to Rs395.72, according to Arab News Pakistan.
The Petroleum Division issued the notification on Thursday, October 8, under the daily pricing system. Profit by Pakistan Today reported that the division linked the change to Platts rates, premiums and other applicable costs.
What changed in the latest fuel notification
Petrol moved up from Rs396.65 to Rs398.96 per litre, Profit reported. Diesel rose from Rs394.94 to Rs395.72. The new rates apply for October 9.
The day before, petrol rose Rs1.82 while diesel fell 91 paisas, The Express Tribune reported. As a result, petrol has now gone up on back-to-back days, while diesel has moved in both directions.
Pakistan dropped its weekly fuel price review on July 17 and moved to daily revisions. The Tribune said the government cited continued tension between the United States and Iran. That tension, it added, kept global oil markets volatile.
Why oil prices are pushing petrol higher
Global crude jumped on Thursday. Brent rose $3.48, or 3.5 percent, to $103.73 a barrel, while WTI gained $2.69 to $91, the Tribune reported.
Two factors drove the rise. Traders feared imminent US strikes on Iran, and Hurricane Isaias disrupted supply in the US Gulf of Mexico. Gains eased after President Donald Trump said the United States would not attack Iran before the November midterm elections. Wire Examiner covered that pledge in its report on Trump’s comments on Iran strikes and the midterms.
Analysts also said the G7’s proposed 100-million-barrel reserve release disappointed the market. According to the Tribune, it appears to draw from a previously announced 400-million-barrel release.
Pakistan imports most of its petroleum. For that reason, supply shocks and shipping risks reach local pumps quickly.
How far prices have come since the war began
Before the US-Iran war began on February 28, petrol cost Rs266.17 per litre and diesel Rs280.86, Arab News reported. Petrol then peaked at Rs458.41 in April, while diesel hit Rs520.35.
By Wire Examiner’s calculation, today’s petrol price is about 50 percent above the prewar level. Diesel is about 41 percent higher. Even so, both fuels remain well below their April highs.
What it means for Pakistan
The government has tried to cushion low-income households. Under a relief scheme announced on September 13, motorcycles, three-wheeler rickshaws and cars with engines up to 800cc get a Rs100 per litre discount, the Tribune reported.
Arab News said motorcycle and three-wheeler users can claim a Rs500 discount per week, up to Rs2,000 a month. Owners of small cars get the discount on up to 10 liters every 10 days, capped at Rs3,000 a month.
Authorities also ordered shops and markets to close by 9 pm from September 17 as part of austerity measures, according to the Tribune.
Fuel costs also feed into transport fares and food prices. That keeps inflation in focus as Pakistan works through its IMF program, which Wire Examiner covered in its report on the IMF staff-level agreement.
Next, watch the following daily notification. It will show whether petrol crosses Rs400 per litre for the first time in weeks.
