ISLAMABAD: The government on Friday reduced the price of petrol and high-speed diesel (HSD) by Rs5 per litre each for the next week, offering some relief to consumers amid volatile global oil markets.
New Prices Effective May 16
In a notification issued on Friday, the Petroleum Division said new fuel rates will come into effect from May 16. Following the decrease, the price of petrol stands at Rs409.78 per litre and HSD at Rs409.58. In the previous weekly review, the government had raised petrol prices by Rs14.92 per litre and HSD by Rs15.
The government has been reviewing petroleum prices on a weekly basis since the US-Israeli conflict with Iran began on February 28. The conflict triggered a global fuel crunch after the closure of the Strait of Hormuz, a key route through which approximately one-fifth of the world’s oil and gas supplies pass during peacetime.
Global Oil Price Context
Global oil prices gained more than 3 percent on Friday, climbing more than 3abarrel,aftercommentsbyUSPresidentDonaldTrumpandIran′sforeignministerfurtherdentedhopesofadealtoendshipattacksaroundtheStraitofHormuz.Brentcrudefuturesgained3.35 to 109.07abarrel,whileUSWestTexasIntermediatefuturesrose3.85 to $105.02. Over the week, Brent has climbed 7.72 percent and WTI 10.11 percent.
Impact on Households and Inflation
Petrol is mainly used by commuters in small vehicles, rickshaws, and two-wheelers. Higher fuel prices significantly impact the budgets of middle and lower-middle-class households who rely on petrol for daily travel. Meanwhile, a significant portion of the transport sector relies on high-speed diesel. Its price is considered inflationary since it is predominantly used in heavy goods transport vehicles, trucks, buses, trains, and agricultural machinery. The consumption of high-speed diesel particularly contributes to increased prices of vegetables and other food items.
