Pakistan raises petrol, diesel prices by Rs26.77 per litre

Lead

ISLAMABAD: The Pakistani government has increased the prices of petrol and high-speed diesel (HSD) by Rs26.77 per litre, effective for the week ending May 1, according to an announcement by the Petroleum Division. The ex-depot price of petrol has been set at Rs393.35 per litre, while high-speed diesel will now cost Rs380.19 per litre.

The revision was communicated through a press release issued late Friday, as reported by Dawn. The increase appears to be driven by a combination of rising global oil prices and the government's fiscal commitments under its programme with the International Monetary Fund (IMF). The IMF's executive board is expected to approve the disbursement of more than $1.2 billion under two ongoing programmes in the coming weeks.

Coverage comparison

Coverage from Dawn's reporters and correspondents over the past week provides a consistent picture of the price adjustment, though with some differing details and emphases. The base fact—the Rs26.77 per litre increase—appears in all accounts, as do the new ex-depot prices for petrol and high-speed diesel.

However, there are some discrepancies in the coverage of subsequent events. One report describes a further increase in prices for the following week, with petrol rising by an additional Rs6.51 and diesel by Rs19.39 per litre, implemented with IMF concurrence. A separate article from the same outlet presents a timeline that conflicts with this, suggesting a possible error in one of the reports. Specifically, the second account describes the same week's price change as representing a Rs26.77 increase, while also detailing different figures for previous price levels.

The initial reports focused on the government's official announcement, framing the decision as a straightforward response to global market conditions. A subsequent article highlighted public reaction, quoting a commuter who said the increase "surprised" him but noted he had been expecting a reduction, given the government's prior price cuts. The report also noted that a petition has been filed in the Lahore High Court challenging the increase, although it did not specify the petitioner or the legal grounds for the challenge.

A fourth piece of coverage, published closer to the end of the month, provided a broader context of the government's fuel pricing strategy and noted the extension of fuel subsidies for motorcyclists and the transport sector. It also reported that Pakistan could face an economic fallout ranging from $10 billion to $68 billion due to the Middle East crisis, according to a briefing to the National Assembly committee.

Key claims

Price Increase: The government raised the price of petrol and high-speed diesel by Rs26.77 per litre, setting the new ex-depot prices at Rs393.35 and Rs380.19 per litre, respectively.

Taxes and Levies: The government is currently charging around Rs135 per litre in taxes on petrol and Rs65 per litre on diesel, which includes the petroleum levy, customs duty, and climate support levy.

Revision Schedule: The government has been revising petroleum prices weekly, in line with a commitment to the IMF to pass on changes in global prices to consumers.

IMF Disbursement: The IMF's executive board is expected to approve the disbursement of more than $1.2 billion under two ongoing programmes, which is seen as crucial for Pakistan's foreign exchange reserves.

Public Backlash: The price increase has drawn widespread criticism from the public and civil society, with a motorist quoted as calling it "highhandedness with the public at large." A legal challenge has been filed in the Lahore High Court.

Perspectives

The reports present a multi-faceted picture of the forces behind the price rise. The government's official line is that the increase is necessary to bring domestic prices in line with international rates and to meet fiscal targets, including the petroleum levy target of Rs1.47 trillion. The decision was taken with the concurrence of the IMF, which has been a key source of external financing for Pakistan. The government also points to the impact of the Middle East conflict—specifically the closure of the Strait of Hormuz—as a driver of global fuel costs.

From the public's perspective, the increase comes as a heavy burden. The rise in diesel prices is particularly painful, as it affects the transport sector and consequently pushes up the prices of goods across the board. One commuter told Dawn that the increase was "highhandedness with the public at large," a sentiment echoed by trade unions and civil society groups. The increase also comes after a period of relative stability, following a series of rate cuts in the previous fiscal year.

The legal challenge to the price hike represents a third perspective, questioning the procedural and substantive basis of the increase. The petition, if it proceeds, could lead to a review of the government's pricing methodology. However, past legal challenges to fuel prices have rarely succeeded, as the courts have generally deferred to the government's economic decision-making. Nonetheless, the move reflects the level of public anger over the decision.