ISLAMABAD: Prime Minister Shehbaz Sharif has hinted at yet another increase in petrol and diesel prices this week, citing the international energy crisis, as back-to-back hikes have already pushed rates to historic highs.
Petrol currently retails at Rs. 399.86 per litre and high-speed diesel at Rs. 399.58 per litre after successive increases: a sharp Rs. 26.77 per litre hike last week followed by another adjustment on May 1, when petrol rose by Rs. 6.51 and diesel by Rs. 19.39. Finance Ministry sources warn that petrol could soon cross the Rs. 400 mark, while some outlets report fears of Rs. 458 per litre if levies are raised further.
Observers note a recurring pattern, that fuel prices are often raised in the weeks leading up to major Muslim festivities, with only brief freezes to avoid shocks during Eid. Ahead of Eidul Fitr in March, prices were hiked twice in early March before being held steady for one week.
Fuel volatility exposes limits of Pakistan’s ‘Peace Mediator’ ambitions
Now, with Eidul Azha approaching on May 27, another hike appears imminent — pushing petrol beyond Rs. 400 per litre and tightening the squeeze on households already cutting back consumption.
Meanwhile, not to forget that global factors are also compounding the crisis. The US-Israel war on Iran and the blockade of the Strait of Hormuz have disrupted crude supplies, driving Brent crude to $111.22 per barrel. Analysts caution that “upward pressure is being exerted on prices every day the Strait of Hormuz is constrained.”
At home, IMF pressure is intensifying as the Fund has demanded higher petroleum levies to meet fiscal targets, with subsidies phased out in favor of direct taxation. Taxes and margins now account for over Rs. 153 per litre, including a petroleum levy of around Rs. 103.50, customs duty of Rs. 23.72, dealer/OMC margins, IFEM, and a climate support levy. The ex-refinery cost remains just Rs. 246.31 per litre, meaning levies and taxes make up more than 38pc of the pump price.
The impact is already visible. Fuel sales fell 7pc year-on-year in April to 1.36 million tons, with petrol down 7pc and diesel plunging 12pc. Motor spirit prices have surged 54pc year-on-year to Rs. 392.64, while high-speed diesel has soared 67pc to Rs. 431.97. Trade unions and civil society warn that the relentless increases are “deepening inflation and pushing everyday life out of reach.”
Officials insist they are trying to avoid what could have been a Rs. 40 per litre jump, while the government prepares to disburse Rs. 50–55 billion to oil marketing companies to settle dues. Petrol pump owners, however, demand a larger payout of Rs82.5 billion to absorb the war-driven crisis.
