Petrol prices in Pakistan are likely to witness a big increase as fresh tensions between the United States and Iran push global oil prices higher.
Fears of a possible disruption in oil supplies through the Strait of Hormuz have damaged international energy markets, driving crude oil prices sharply upward.
Pakistan, which relies heavily on imported petroleum products, could face higher fuel costs if the upward trend continues.
In recent days, US crude oil prices have climbed to around $82 per barrel, while Brent crude has surged to nearly $84 per barrel, compared with approximately $68 and $71 per barrel just weeks ago.
Meanwhile, the government is also considering changes to the mechanism used for setting petroleum prices. During a meeting of the Petroleum Price Reforms Committee chaired by Petroleum Minister Ali Pervaiz Malik, officials discussed introducing a daily fuel price adjustment system instead of the current weekly pricing mechanism.
The committee is expected to submit its recommendations to the prime minister, who will decide whether to adopt a new framework for determining petroleum product prices.
Economist Syed Wasif Naqvi said the current uncertainty surrounding the Strait of Hormuz makes it unlikely that the government will immediately shift to a daily pricing model. He noted that fuel prices are determined using several factors, including average international oil prices, the exchange rate, petroleum levy and other fiscal considerations.
Oil prices climbed nearly 3 per cent on Tuesday (today), extending a sharp rally as the worsening conflict between the United States and Iran raised fresh concerns over global crude supplies moving through the Strait of Hormuz.
Brent crude rose $1.90, or 2.3 per cent, to $85.20 a barrel by 0630 GMT, while US West Texas Intermediate crude gained $1.91, or 2.4 per cent, to $80.05 a barrel. Both benchmarks had earlier surged by more than $2 before trimming some gains.
The latest rise came after Brent jumped 9.6 per cent in the previous session, marking its biggest single-day gain since May 2020. Prices have now reached their highest level in four weeks.
Markets reacted after the US military launched a third straight night of strikes on Iran. President Donald Trump also reinstated a blockade of Iranian shipping and proposed a 20 per cent fee to protect vessels passing through the Strait of Hormuz, one of the world’s busiest oil transit routes.
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