Fuel prices in Pakistan revised for third fortnight in a row

Ministry of Finance has increased consumer prices of petroleum products for the third consecutive fortnight in response to recent fluctuations in the international oil market. The revised prices will take effect on February 1, 2025.

High Speed Diesel (HSD) has increased from PKR 260.95 to PKR 267.95 per liter, an uptick of PKR 7.00.

MS (Petrol) has risen from PKR 256.13 to PKR 257.13 per liter, a marginal increase of PKR 1.00.

This adjustment reflects the latest trends in the global oil market and aims to balance domestic demand and supply, Ministry noted in a statement.

An analyst said the expected increase is attributed to a 4.8% rise in international oil prices, from $79.54/bbl on January 15, to $83.40/bbl on January 31, following OPEC’s decision to delay its production ramp-up plans.

Another reason for fuel price revision is due to a rise in the cost of refining and exchange rate adjustments. Specifically, the ex-refinery price of diesel went up by PKR 4.03 per liter, and exchange rate adjustments added PKR 2.43, with an increase in the inland freight margin by PKR 0.47.

For petrol, the ex-refinery price increased by PKR 2.47 per liter, and exchange adjustments added about PKR 0.23. To lessen the impact on consumers, the inland freight margin for petrol was reduced by PKR 1.70.

It may be mentioned here that on January 15, the price of diesel was increased by PKR 2.61, and petrol went up by PKR 3.47 per liter. Earlier, on December 31, the diesel price rose by PKR 2.96, while petrol saw a smaller rise of PKR 0.56 per liter.

In the last three fortnightly announcements, diesel price has been increased by a cumulative PKR 12.57 per liter, and petrol by PKR 5.03 per liter.

Oil prices are poised to end the week approximately $2 per barrel lower than last week, with the January ICE Brent futures contract closing just below $77 per barrel.

Despite this being the second consecutive week of decline, the downturn could be reversed swiftly if former President Donald Trump's February 1 deadline for Canada and Mexico results in the US imposing punitive 25% tariffs. Should the threat materialize, bullish market forces are likely to drive Brent prices back above $80 per barrel.