In light of the upward trajectory in global petroleum prices, the interim government took action on Friday to significantly raise the rates of petrol and diesel for the forthcoming two-week period. According to the Finance Division, petrol prices will see a substantial increase of Rs26.02 per liter, while high-speed diesel (HSD) will experience a hike of Rs17.34 per liter. Consequently, the new prices stand at Rs331.38 per liter for petrol and Rs329.18 per liter for HSD.


This marks the second instance within a month where prices of petroleum products have been elevated to reach an unprecedented high. On September 1st, the caretaker government had previously raised petrol and diesel prices by more than Rs14. The Finance Division clarified that this recent price adjustment is a result of the continuous upsurge in international petroleum prices and fluctuations in exchange rates.


The surge in petrol prices today was widely anticipated due to the persistent increase in global oil prices. However, industry experts suggest that despite the appreciation of the rupee, it may not suffice to counterbalance the impact of rising global oil prices.


The government adheres to a bi-weekly review and adjustment of petroleum prices, following recommendations from Ogra (Oil and Gas Regulatory Authority). The ultimate decision, however, remains within the purview of the finance ministry, which occasionally absorbs a portion of the increase to provide relief to consumers.


Nonetheless, the government is obligated to raise fuel prices in line with the agreement reached with the International Monetary Fund (IMF) under a $3 billion standby arrangement. Recent reports indicate that oil prices reached a 10-month high on Friday, driven by Saudi Arabian production cuts and optimism surrounding Chinese demand. As of 12:15 pm EDT (1615 GMT), US West Texas Intermediate futures had surged by 62 cents, or 0.7%, to reach $90.78 per barrel, while Brent crude futures had risen by 21 cents, or 0.2%, to $93.91 per barrel. Both benchmarks had reached their highest points since November 2022 earlier in the session, with a weekly increase of approximately 4%.