The government has announced a revision in fuel prices for the next fortnight starting September 16, bringing another cost pressure on households and businesses.
Introduction & Background
In its latest fortnightly review, Pakistan has increased the price of high-speed diesel (HSD) by Rs2.78 per litre, setting the new rate at Rs272.77, up from Rs269.99. Meanwhile, the price of petrol remains unchanged at Rs264.61 per litre.
The Oil and Gas Regulatory Authority (OGRA) recommended the revision based on international market trends and exchange rate fluctuations.
Impact on Consumers and Economy
Fuel prices play a critical role in Pakistan’s inflationary trends, directly affecting transportation, agriculture, and daily living costs.
- Petrol: Primarily used by motorcycles, cars, and small vehicles, petrol prices impact daily commuters and urban households.
- Diesel: Essential for trucks, buses, and farm machinery, diesel price hikes have a broader ripple effect on food supply chains, goods transport, and crop production costs.
The price adjustment means that transport fares and agricultural production costs may rise, putting additional pressure on lower- and middle-income families.
Why Diesel Matters More
Unlike petrol, diesel powers the backbone of Pakistan’s economy, including:
- Freight and public transport networks, which distribute goods nationwide.
- Agricultural machinery, crucial for harvesting and irrigation.
- Power generation in areas dependent on diesel-based generators.
A hike in diesel prices often leads to higher food prices and logistics costs, triggering inflation that affects essential commodities.
Government’s Position
Officials cited global crude oil price fluctuations and exchange rate volatility as key reasons for the adjustment. The government emphasized that maintaining petrol prices was a step to ease the burden on daily commuters, though rising international oil costs continue to challenge Pakistan’s economic stability.
Conclusion
With diesel now priced at Rs272.77 per litre and petrol steady at Rs264.61, the increase will likely raise transport, food, and agricultural costs in the coming weeks. Economists warn that sustained hikes could further strain low- and middle-income households, already grappling with inflation and reduced purchasing power.
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