In Karachi, the current caretaker government is expected to raise the prices of petrol tonight due to higher global oil prices and increased demand. The price of petrol is likely to increase by about 2%, or Rs5 per liter, to Rs280.62, while high-speed diesel is expected to rise by Rs2 to Rs289.33 per liter. Light diesel oil may go up by Rs0.80 per liter, and kerosene oil by Rs0.70 per liter.

Every 15 days, petrol prices in Pakistan are adjusted based on global oil prices and the exchange rate of the rupee to the dollar. The government considers factors like expected fuel consumption, supply costs of Pakistan State Oil, and monthly tax goals when setting petroleum prices. These new prices, announced by the government tonight, will take effect on March 1.

In response to the global increase in oil prices, the government recently raised petrol and diesel prices by Rs8.37 and Rs2.73 per liter, respectively, over the past two weeks. Geopolitical tensions in the Middle East and concerns about oil supply shortages have contributed to a nearly 10% rise in crude oil prices in the first two months of 2024.

Since Pakistan imports about 85% of its oil, higher fuel costs could lead to increased living expenses and transportation costs. In January, petroleum product sales in the country decreased by 4% compared to the previous year, mainly due to lower petrol and diesel sales as consumers reduced spending amid a slowing economy.

To address economic instability, the government entered into a $3 billion loan agreement with the International Monetary Fund in July last year, committing to implementing measures such as tax hikes, higher energy prices, and adopting a market-based currency exchange rate.

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