In an unprecedented move, the price of kerosene has skyrocketed by Rs130.08 per litre, reaching a new rate of Rs318.81, according to an official notification issued on Saturday. This staggering increase comes just one day after the federal government raised petrol and diesel prices by Rs55 per litre, as surging global oil prices—fueled by the escalating US-Israel war with Iran—continue to pressure domestic energy costs.
Weekly Review Signals Urgent Adjustments
The government has shifted from its usual fortnightly review to a weekly assessment of fuel prices, reflecting the acute volatility in global markets. Petroleum Minister Ali Pervaiz Malik announced the new rates alongside Deputy Prime Minister Ishaq Dar and Finance Minister Muhammad Aurangzeb. Following the review, petrol now costs Rs321.17 per litre, up from Rs266.17, while diesel has risen to Rs335.86 per litre from Rs280.86.
Strait of Hormuz Closure Triggers Global Shock
The decision marks the first weekly fuel price review since regional tensions threatened a major share of global energy flows, following the closure of the Strait of Hormuz. Retaliatory attacks by Tehran across the Gulf region have virtually halted activity in this critical chokepoint, upending world energy and transport sectors.
- Crude oil soared 8.5% on Friday, with a nearly 30% weekly increase after President Donald Trump demanded Iran’s “unconditional surrender.”
- The petroleum development levy (PDL) on petrol was raised from Rs84.40 to Rs105 per litre, while the levy on high-speed diesel was reduced from Rs76.21 to Rs55 per litre.
- Dealers warn that petrol supplies may tighten within two weeks as the Middle East conflict fuels a broader crisis.
Broader Economic Impact
The ripple effects are being felt across the economy. The Pakistan Stock Exchange (PSX) has faced downward pressure as oil prices and shipping constraints weigh on market sentiment. Meanwhile, the State Bank of Pakistan is expected to hold interest rates steady, as the oil rally complicates the inflation outlook.
Amid these challenges, Saudi Arabia has provided assurances on oil shipments, offering some relief to the PSX. However, with the US Treasury hinting at lifting more Russian oil sanctions and approving temporary sales of stranded Russian oil to India, global energy dynamics remain in flux.
As households and industries brace for higher costs, the government faces mounting pressure to stabilize the energy sector while navigating the turbulent geopolitical landscape.
