Govt increases petrol by 88 paisas, cuts diesel by Rs1.88 for Oct 6

Read:Govt increases petrol by Rs2.1, diesel by 30 paisas till Oct 5On July 17, the government announced a new pricing mechanism under which petroleum product prices would be reviewed and notified daily, replacing the weekly pricing mechanism, as renewed tensions between the United States and Iran continued to drive volatility in global oil markets and raise concerns over fuel supplies.

On September 13, PM Shehbazannounceda special relief scheme offering Rs100 per litre off petrol for motorcycles, three-wheeler rickshaws and cars with engines up to 800cc, in an attempt to shield lower-income consumers from the impact of rising petroleum prices. Under the proposal, an estimated 11.8 million beneficiaries would be covered.

Around 10 million two-wheeler users and 800,000 three-wheeler users would be entitled to relief on 20 litres of fuel per month, translating into a maximum monthly benefit of Rs2,000 per beneficiary. Another one million users of cars up to 800cc would receive relief on 30 litres per month, providing them with a maximum benefit of Rs3,000 each.

On Sept 17, the government reintroduced austerity and fuel conservation measures amid rising fuel prices, tightening business operating hours and restricting public events. Under the measures, notified with immediate effect, shops, markets, shopping malls, bazaars, departmental stores, grocery stores, general stores and kiryana shops would close by 9pm throughout the week, the Cabinet Division.

Marriage halls, marquees and other commercial venues hosting festive events would close by 10pm, while restaurants, cafes, eateries, food outlets and standalone fruit and vegetable shops would be allowed to operate until 11pm. Takeaway and home delivery services would remain exempt from the timing restrictions. Global geopolitical developments continue to pose significant risks.

International oil prices are influenced by decisions taken by OPEC+, conflicts in the Middle East, sanctions on oil-producing nations, and disruptions in critical shipping routes such as the Strait of Hormuz and the Red Sea. Any interruption in these supply chains can immediately increase crude oil prices and freight costs.

Since Pakistan imports the majority of its petroleum requirements, these developments quickly translate into higher domestic fuel prices. Oil prices edged lower on Monday after crude exports from the ​Middle East increased and the Group of Seven nations pledged to boost supplies, though selling was limited by ‌ongoing disruption fears linked to the US-Israeliwar on Iran.

Brent crude futures were down $1.10, or 1.08%, at $101.15 a barrel by 11:59 am ET (1559 GMT), while US West Texas Intermediate crude was down 89 cents, or 0.98%, at $90.22.

"A truce in the Middle East remains elusive, and ‌renewed hostilities ⁠between Saudi Arabia and the Iran-backed Houthis will ensure that attacks on energy infrastructure and vessels will continue, keeping the geopolitical risk premium at an elevated level," said PVM Oil Associates analyst Tamas Varga.