Pakistan's Petroleum Minister Ali Pervaiz Malik announced on Sunday that global prices of refined fuel are expected to decline further, reiterating the government's commitment to passing on the benefits of lower energy prices to consumers.
Government to Pass on Global Price Reductions
Malik stated that crude oil prices have fallen sharply worldwide, prompting the government to slash petrol and diesel prices earlier this month. However, he emphasized that additional relief will be provided when the global prices of refined petroleum products also decrease.
“Crude oil prices have fallen significantly, and refined petroleum product prices are also expected to decline accordingly, enabling relief beyond the current reduction of more than Rs155 per liter on petrol and Rs200 per liter on diesel to be passed on soon,” Malik wrote on social media platform X.
Impact of US-Iran Conflict on Fuel Prices
Pakistan increased petroleum product prices multiple times since February, when the US-Iran war disrupted energy supplies and shipping through the Strait of Hormuz, driving global oil prices higher. In response to a peace agreement between the United States and Iran, Islamabad slashed fuel prices by up to Rs74 per liter earlier this month.
Despite this reduction, consumers are awaiting further relief as Brent crude dropped to $72 per barrel worldwide. Malik noted that petrol prices in Pakistan have been determined based on Platts rates for decades, a benchmark widely used in the fuel industry for pricing physical and financial contracts.
Price Trends Before and After the War
According to the minister, the price of petrol on February 27, before the US-Iran war began, was $76 per barrel, which increased to $136 per barrel by April 2. By June 27, the price had declined to $92 per barrel. Similarly, diesel was priced at $89 per barrel on February 27, rose to $284 per barrel on April 2, and fell to $105 per barrel on June 26.
“As prices adjust in line with crude oil, which is now at pre-war levels, benefit will be transferred to consumers,” Malik said.
Broader Economic Implications
Fuel prices are closely monitored in Pakistan as they directly impact transport costs, electricity generation, and inflation, influencing broader consumer prices. The government's commitment to passing on global price reductions is seen as a key step to provide economic relief to citizens.
