Govt hikes petrol by Rs4.4, diesel by Rs3.62 as global oil prices surge

The federal government on Thursday increased the prices of petrol and high-speed diesel by Rs4.40 and Rs3.62 per litre, respectively, effective July 24. Following the latest revision, petrol now stands at Rs331.52 per litre, while HSD is priced at Rs378.66. The price hike comes amid a surge in global oil prices, with Brent crude jumping 6% to $100.50 a barrel following attacks on tankers in the Red Sea, which have choked off a second crucial Middle East artery for global oil supplies alongside Iran’s near-closure of the Strait of Hormuz.

This is the fourth consecutive day the government has revised fuel prices after switching to a daily review mechanism last week to reflect volatility in international markets. The new system bases daily fuel prices on a seven-day average of international market rates, ensuring timely adjustments to align with global trends. The latest increase was anticipated as oil prices surged to their highest level since May, driven by escalating tensions in the Middle East.

The price revision came after the government and the All Pakistan Petrol Pump Owners Association reached an agreement a day ago to postpone the association’s planned nationwide shutdown for two weeks. The agreement followed successful negotiations with Petroleum Minister Ali Pervaiz Malik, who assured dealers that their long-pending concerns, including demands for a monthly pricing mechanism and an increase in dealer commissions, would be addressed.

The surge in global oil prices has been fueled by Houthi attacks on oil tankers in the Red Sea, which have raised fears of a wider regional conflict. The attacks have disrupted shipping through the Bab el-Mandeb strait, a vital alternative route for Saudi oil exports, adding to the supply concerns already triggered by the near-closure of the Strait of Hormuz. The dual disruptions have put energy markets on edge, with fears of a global supply crunch intensifying.

The spike in oil prices has also impacted global stock markets, with major tech giants knocking US stocks lower and Europe’s borrowing costs spiking to long-term highs. The unsettling day across markets reflects the broader economic implications of the Middle East conflict, which continues to disrupt global energy supplies and threaten economic stability.

As the situation remains volatile, further price revisions are likely in the coming days. The government has assured the public that it is monitoring the situation closely and will take necessary measures to mitigate the impact on consumers. However, with global oil prices expected to remain elevated, Pakistani consumers are likely to face continued pressure on fuel costs, affecting transportation, goods, and services across the country. The government’s daily price revision mechanism aims to provide transparency and responsiveness to market changes, but it also means that consumers will face more frequent price adjustments as global oil markets remain volatile. The coming days will be critical in determining whether the situation stabilizes or whether further hikes are needed to reflect global trends.