The government of Pakistan has announced yet another increase in petrol price and high-speed diesel (HSD) price, further burdening the common citizen. Here’s what you need to know about the recent surge in fuel prices.

The Latest Hike in Petrol Price

On  September 15th, 2023, the government increased the petrol price by a staggering Rs. 26.02 per liter. This latest adjustment means that petrol now costs Rs. 331.38 per liter, up from Rs. 305.36. Simultaneously, the price of high-speed diesel (HSD) experienced a significant jump of Rs. 17.34 per liter, reaching Rs.329.18 from its previous price of Rs. 311.84.

The Government’s Rationale

The Finance Division cites two primary reasons for these price hikes. Firstly, international petroleum prices have been on the rise. Secondly, fluctuations in the exchange rate have further pressured the situation. As a result, the government deemed it necessary to revise the consumer prices of petroleum products. These new prices became effective on September 16, 2023.

Exchange Rate Impact on Petrol Price

Exchange rates play a pivotal role in determining fuel prices. In the last fifteen days, the exchange rate experienced significant depreciation. A surge of Rs. 14 per liter was being expected in the price of petrol, but these new figures are considerably higher!

Given that petroleum product prices are calculated based on the average exchange rate of Pakistan State Oil (PSO), it’s projected that this exchange rate shift will contribute to an additional Rs. 2 per liter for petrol and Rs. 7 per liter for high-speed diesel.

Recent Price Trends

This recent surge follows a substantial increase announced on August 31, with petrol prices rising by nearly Rs. 15 and HSD prices by Rs. 18. These consecutive hikes have led to a historic high in petrol prices, impacting citizens’ daily lives.

The government’s rationale for these hikes has varied from supporting International Monetary Fund (IMF) programs to reacting to uneven surges in the international oil market. The most recent increase is primarily attributed to the exchange rate depreciation, as the Pakistani rupee faces significant challenges against the mighty US dollar.

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