ISLAMABAD: Pakistan is going through one of its worst fuel price shocks this year as petrol and diesel prices have been increased for the third day in a row under the new daily pricing system.
According to the latest notification from OGRA and the Petroleum Division issued on 8th September and effective from 9th September, the price of petrol has been increased by 3.40 rupees to reach 367.75 rupees 35 paisa per litre. The price of high-speed diesel has been increased by 6.72 rupees to reach 392 rupees 67 paisa per litre.
This increase came just a day after petrol was increased by 12 rupees 90 paisa and diesel by 3 rupees 72 paisa on 8th September. In just two days, petrol has become more expensive by more than 18 rupees and diesel by almost 8 rupees.
The government has shifted to a daily pricing mechanism from the old fortnightly system. Now OGRA revises prices every day based on the seven-day average of international oil markets and currency fluctuations.
This means any rise in global crude is passed on to consumers immediately. The main reason behind the continuous rise is the situation in the Middle East. International crude oil has surged above 90 dollars per barrel due to the US-Israeli war on Iran and Houthi attacks on Saudi oil infrastructure.
Houthis attacked an airbase in Khamis Mushait and oil facilities on Tuesday, injuring 73 people. Saudi Arabia retaliated with 54 airstrikes across Yemen. Iran has also declared a prohibited zone near the Strait of Hormuz and claimed it captured a US submarine drone.
Since three million barrels of oil pass daily through the Bab al-Mandeb strait and Hormuz, any escalation is pushing oil prices higher. Looking at the future, analysts say if crude remains above 90 dollars and tensions in the Gulf continue, petrol in Pakistan may cross 380 to 400 rupees per litre by the end of September.
Diesel being used in trucks, buses, tractors, tube wells and generators will directly increase transport fares, agricultural costs and prices of food items. Transporters have already announced a 10 percent increase in fares from tomorrow. Petroleum Minister Ali Pervaiz Malik said prices will be reviewed tomorrow morning again and will depend on global markets.
Relief can only be expected if crude falls below 80 dollars or the conflict in the Gulf de-escalates. Until then, consumers should be prepared for more increases under the daily pricing system.
Read also: Petrol and Diesel Prices Raised Again as Government Issues Notification
