Government cuts petrol price by Rs3.19, diesel by Rs1.50 under new fuel pricing system

The federal government has announced a reduction in petrol and high-speed diesel (HSD) prices for August 7, providing limited relief to consumers amid continued fluctuations in international oil markets

The federal government has announced a reduction in petrol and high-speed diesel (HSD) prices for August 7, providing limited relief to consumers amid continued fluctuations in international oil markets.

According to a notification issued by the Ministry of Petroleum, petrol prices have been reduced by Rs3.19 per litre, bringing the new price to Rs329.82 per litre. Meanwhile, the price of high-speed diesel has been lowered by Rs1.50 per litre and will now be available at Rs382.36 per litre.

The latest adjustment comes just one day after the government increased petrol prices by Rs4.45 per litre while reducing HSD prices by Rs2 per litre for August 6. The frequent revisions reflect the country’s newly introduced fuel pricing mechanism, which allows daily adjustments based on international market movements.

The government introduced the daily fuel price review system on July 17 in response to volatility in global oil prices following renewed tensions in the Middle East. Under the new mechanism, domestic fuel prices are calculated using a seven-day average of international petroleum rates in line with global pricing practices.

Pakistan remains highly dependent on imported petroleum products, making domestic fuel prices vulnerable to changes in international crude oil markets. According to the Pakistan Economic Survey 2024-25, petroleum products represent one of the country’s largest import categories. Any rise in global oil prices increases Pakistan’s import bill, puts pressure on foreign exchange reserves, and contributes to inflation.

In previous years, fuel prices were managed through government subsidies and administrative controls. While such measures provided short-term relief for consumers, they also increased financial pressure on the national budget, oil marketing companies, and refineries. Higher subsidies contributed to fiscal challenges and increased public borrowing.

Global factors continue to influence oil prices, including decisions by oil-producing nations, conflicts in energy-producing regions, sanctions, and disruptions in major shipping routes such as the Strait of Hormuz and the Red Sea.

International crude prices recently moved higher after reports that an Iranian parliamentary committee was considering measures affecting shipping through the Strait of Hormuz. Brent crude futures increased by more than $3 per barrel, while US West Texas Intermediate (WTI) futures also recorded gains.

Market analysts said traders remain focused on geopolitical developments and negotiations involving major oil-producing countries. Since a significant portion of global energy supplies previously moved through the Strait of Hormuz, any disruption in the route could immediately affect crude prices and fuel costs worldwide.

The latest reduction in Pakistan’s fuel prices is expected to offer temporary relief to motorists and businesses, although future adjustments will continue to depend on international oil market trends.