Many Pakistanis are feeling uneasy after another rise in fuel prices, as tensions in the Middle East push global oil markets into turmoil.
On March 1, the government raised the price of petrol by Rs8 per litre and high speed diesel by Rs5.16 per litre for the next fortnight. A statement from the Petroleum Division confirmed the increase.
Petrol in Pakistan now costs Rs266.17 per litre, up from Rs258.17. High speed diesel stands at Rs280.86 per litre.
For many families, fuel was already expensive. The latest hike has deepened concerns that petrol prices may climb even further in the coming weeks. Transport costs often go up after fuel increases, and that can lead to higher prices of food and other daily goods.
Global shock rattles markets
The price rise comes as global oil markets react sharply to the conflict involving the US, Israel and Iran.
Oil prices surged on March 2 after US and Israeli strikes on Iran, followed by retaliatory attacks on Israeli and US military sites in the region. The fighting has raised fears of a wider conflict in the oil rich Middle East.
West Texas Intermediate crude was trading at $72.79 per barrel early Monday, up 8.6 percent from about $67 on Friday, according to data from CME Group. Brent crude, the international benchmark, reached $79.41 per barrel, up 9 percent from $72.87, based on figures from FactSet.
At one point, Brent jumped almost 14 percent at the start of trading in Asia. Investors reacted quickly, pulling money from stocks and moving towards safer assets.
A key concern is the Strait of Hormuz. About 20 percent of the world’s seaborne oil passes through this narrow waterway.
Reports said tankers were piling up on either side of the strait, with some ships facing insurance problems. Two vessels were attacked on Sunday, adding to supply fears.
Energy analysts warned that unless tensions ease quickly, oil prices could move even higher. Any long disruption could hit countries like Pakistan that rely heavily on imported fuel.
Govt steps in
In response to the global situation, Prime Minister Shehbaz Sharif has formed an 18 member high level committee to assess the impact of rising oil prices on Pakistan’s economy.
The body will be led by Finance Minister Muhammad Aurangzeb. It includes key federal ministers, the governor of the State Bank of Pakistan, senior officials from the petroleum and finance ministries, and representatives from major energy companies and intelligence agencies.
According to a notification from the Prime Minister’s Office, the committee will monitor international oil price movements and review the country’s fuel supply chain. It will also study the foreign exchange impact of higher oil prices and suggest steps to keep supplies uninterrupted.
The committee is expected to meet daily and report directly to the prime minister.
Higher global oil prices usually mean more pressure on Pakistan’s import bill and foreign exchange reserves. They can also add to inflation at a time when many people are already struggling with the cost of living.
Experts say it is still uncertain how much further petrol prices may rise in Pakistan. The new government committee will closely monitor global oil markets, the supply situation, and the exchange rate to try to mitigate any sudden increases.
However, analysts warn that if tensions in the Middle East persist or oil supply remains disrupted, Pakistan could see additional price hikes in the coming weeks.
