Daijiworld Media Network - Islamabad

Islamabad, Apr 3: Pakistan has announced a steep increase in fuel prices, raising petrol by 43 per cent and high-speed diesel (HSD) by 55 per cent, amid rising global oil prices triggered by the ongoing conflict involving the United States, Israel, and Iran.

The government on Thursday increased petrol prices by Rs 137.23 per litre to Rs 458.41 from Rs 321.17, while HSD was raised by Rs 184.49 per litre to Rs 520.35 from Rs 335.86, with immediate effect. The price of kerosene was also increased by Rs 34.08 per litre to Rs 457.80.

Ali Pervaiz Malik termed the move a “difficult decision”, stating that the aim was to restrict subsidies to the most deserving sections while maintaining fiscal discipline and economic stability.

The government also revised petroleum levy rates, increasing the levy on petrol to Rs 160 per litre from Rs 105, while reducing it to zero on diesel from Rs 55 to cushion the impact.

Khurram Shehzad said the price hike was necessary to control rising consumption, which saw an 8 per cent increase in petrol and a 13 per cent rise in HSD usage last month.

He noted that the government had initially resisted increasing prices for three weeks, raising them by Rs 55 soon after the conflict began, before opting for a sharper hike.

To mitigate the impact, the government announced targeted subsidies. Motorbike owners will receive a subsidy of Rs 100 per litre for up to 20 litres per month, while small farmers will be given a one-time assistance of Rs 1,500 per acre during the harvest season.

Intercity and goods transport sectors will also receive a subsidy of Rs 100 per litre, subject to monthly review, while truck operators will be provided direct support of Rs 70,000 per month.

The decision follows the government’s indication that it could not sustain further subsidies after already providing Rs 129 billion in support. Earlier, austerity measures were introduced and the development budget was cut by Rs 100 billion to keep fuel prices lower.