Pakistan Petrol Prices Surge Amid Global Tensions

The Finance Division of Pakistan has announced significant increases in petrol and diesel prices, with petrol rising by Rs4.80 per litre and diesel by Rs7.95 per litre, effective from July 16, as part of the government's commitment to the International Monetary Fund.

The new prices will see high-speed diesel being sold for Rs262.59 per litre and petrol for Rs258.43 per litre. The increases are based on the recommendations of the Oil and Gas Regulatory Authority (Ogra) and relevant ministries. The government had earlier announced the imposition of a petroleum levy and carbon levy on furnace oil and a charge on petrol and diesel.

The proposed hike is expected to have a significant impact on consumers, particularly commuters and daily wage earners, and may lead to higher logistics and commodity costs. To mitigate the effects of global oil price fluctuations, Pakistan has formed a 16-member crisis committee to monitor petrol prices, ensure uninterrupted fuel supplies, and evaluate the fiscal fallout of global oil price hikes.

The committee, chaired by the finance minister, includes key economic and energy policymakers from various ministries and organizations. Its terms of reference include tracking petroleum futures, evaluating foreign exchange implications, and recommending strategies to stabilize the domestic market. The committee will submit weekly reports to the Prime Minister and conduct a fiscal impact analysis in case of a prolonged conflict.

As global tensions escalate, particularly with Israel's attack on Iran threatening global oil flows, Pakistan's economy remains vulnerable to external shocks. The government's decision to increase petrol prices is likely to have far-reaching consequences for the country's economy and citizens, making it essential to monitor the situation closely and implement measures to minimize the impact.