Petrol prices in Pakistan have witnessed an increase yet again with the government increasing the price of petrol by Rs4.10 and that of high speed diesel (HSD) by Rs6.41 per litre with effect from Wednesday, September 16.
After the increase in prices, petrol will be available for sale at Rs384.34 per litre while HSD will cost Rs415.83 per litre. The increased rate was determined by the Oil and Gas Regulatory Authority (OGRA) using the current petroleum pricing structure.
The recent increase comes at a time when there are ongoing uncertainties in the international oil market in addition to concerns about the availability of oil in light of the deteriorating security situation in West Asia. According to the Petroleum Division, the increase in price can be attributed to increase in international Platts prices, premiums and others costs.
In light of the effects of the recent increase in fuel price, efforts to cut down on fuel usage have also received much attention. Reports emerging on Tuesday indicated that the government might be exploring options for a possible ‘smart lockdown’ and other austerity steps such as altering working hours and closing markets earlier to cut down on transportation-related fuel consumption. Some reports said proposals could include a four-day working week, rotational attendance in offices.
However, the government has strongly contradicted reports that talks have taken place about smart lockdown. Federal Minister for Parliamentary Affairs Tariq Fazal Chaudhry said in a statement on Tuesday that there were no deliberations regarding the idea of closing Islamabad or imposition of smart lockdown in the meeting led by the Deputy Prime Minister Ishaq Dar. The focus of the meeting was on fuel prices and ways to give relief to citizens.
The contradictory statements have nevertheless maintained the idea of fuel conservation. Given that the government is trying to control petroleum consumption, there have been previous talks about austerity measures that might include cutting down unnecessary traveling, managing office operations, and limiting working hours. According to Information Minister Atta Tarar, austerity measures can also be revived if necessary.
Government rolls out fuel relief scheme
Simultaneously, the government is implementing its Prime Minister’s Fuel Relief Scheme to offer targeted aid to those individuals whose lives have been adversely impacted by the rise in fuel costs. This scheme is to be launched nationwide after the end of a pilot project in Islamabad during the time period between Wednesday and Thursday.
According to the scheme, motorbikers are provided with five liters of subsidized petrol every week while car owners can avail of 10 liters of subsidized petrol every ten days. According to the government, this assistance is being offered to help fuel consumers, especially those who use their motorcycles or small cars for earning a livelihood.
According to Climate Change Minister Musadik Malik, the government is trying to cushion its economy against the oil price hike through the program. According to him, though the aid will not mitigate the effect of increased fuel prices fully, the amount of relief will be what the economy can handle at present.
The National Steering Committee on Fuel Subsidy, headed by Ishaq Dar, the Deputy Prime Minister, has also instructed the concerned quarters to make sure that the money reaches the participating petrol pumps within 24 hours. The provincial governments have been asked to create awareness at the district levels regarding the facility.
Growing pressure over energy supplies
This latest rise in fuel is coming at a time when Pakistan continues to watch the effects of disturbances in the energy routes in the region. The Energy Minister, Sardar Awais Ahmad Khan Leghari and Musadik Malik, have raised alarm about the potential impact of disturbances around the Strait of Hormuz and Bab el-Mandeb, which could increase pressure on countries dependent on foreign energy sources. International prices of crude oil are once again above the $100 per barrel mark.
Though there have been concerns regarding fuel supply issues, Leghari assured that Pakistan was able to maintain its power plants running through an increased use of domestic energy sources. As revealed in figures by the minister, 72% of Pakistan’s electricity generation in August was through domestic energy sources including hydroelectricity, local coal, nuclear energy, local gas, wind, and solar energy, while the other 28% was generated through imported coal and RLNG.
Another step that the government has taken in recent times is based on the introduction of the daily petroleum pricing system due to volatility in the international petroleum prices. With such a system, the prices of petroleum can be increased or decreased based on the international market movements and not through longer pricing periods.
But for the end-users, it is a tough time with the introduction of the new rates. With the rise in the petrol rate to Rs384.34, motorists will have to adjust their transportation budget once again, while the increased cost of diesel is likely to burden the transport and goods sectors as well since the majority of commercial vehicles use it.
For now, there is no official confirmation of a nationwide smart lockdown, despite reports that fuel-saving options have been under consideration.
