Islamabad, April 3 Pakistan has announced an unprecedented increase of 43 percent and 55 percent in the prices of petrol and high-speed diesel (HSD), respectively, in response to soaring global oil prices amid the US-Israel war on Iran.
The government made the announcement on Thursday. The price of petrol has been increased by Rs 137.23 per litre (42.7 percent) to Rs 458.41 from Rs 321.17, while HSD by Rs 184.49 per litre (55 percent) 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.
The government also adjusted the petroleum levy rates to limit the increase in diesel prices as the levy on petrol was increased to Rs 160 per litre from Rs 105, while it was reduced to zero on diesel from Rs 55.
Petroleum Minister Ali Pervaiz Malik, while making the announcement, which he termed as a "difficult decision", said that the objective was to restrict subsidies to the most deserving segments while maintaining fiscal discipline and preserving economic stability.
Advisor to Prime Minister on Economic Affairs, Khurram Shehzad, said in an interview with Geo News that the government increased the prices to control consumption after it recorded an 8 percent increase in petrol and a 13 percent rise in HSD consumption last month.
"The government took the decision to increase prices after resisting the rise during the past three weeks when it first raised prices by Rs 55 soon after the war started," he said.
He said that the government was still providing subsidies to motorbike owners, intercity transport, good transport vehicles and agriculturists.
"The government decided to provide a Rs100 per liter subsidy to the motorbike owners and the subsidy will be applicable for 20 liters per month," he said.
He said that small farmers will receive a one-time subsidy of Rs1,500 per acre as immediate support during the harvest season, while inter-city and goods transport, a subsidy of Rs 100 per litre would be provided, which will be reviewed every month. Truckers would receive direct support of Rs 70,000 per month.
The decision came as government officials indicated during the week that after providing a Rs 129 billion subsidy, it was not possible to further subsidize petroleum products. Earlier, it introduced several austerity measures and also cut the development budget by Rs 100 billion to provide cheap fuel to the masses.
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