In a swift policy reversal, the government of Pakistan has announced a reduction of PKR 80 per litre in petrol prices, just a day after a steep hike triggered widespread public backlash. Prime Minister Shehbaz Sharif made the announcement in a late-night address, signalling an attempt to ease mounting pressure over rising fuel costs, reported news agency PTI.
The revised price brings petrol down to PKR 378 per litre, effective immediately. The decision comes amid growing criticism from citizens and industry stakeholders following one of the sharpest fuel price increases in recent years, reported PTI.
Unprecedented hike sparked public outrage
The move follows Thursday’s announcement of a significant surge in fuel prices, with petrol rising by 43 per cent and high-speed diesel (HSD) by 55 per cent. Petrol prices had jumped from PKR 321.17 to PKR 458.41 per litre after the government increased the levy from PKR 105 to PKR 160 per litre, reported PTI.
Similarly, HSD prices were raised from PKR 335.86 to PKR 520.35 per litre, although the levy on diesel was removed. The contrasting approach led to calls for similar relief on petrol, intensifying public dissatisfaction, reported PTI.
The abrupt increase had raised concerns about inflationary pressures, particularly on transportation and essential goods, prompting the government to reconsider its decision within hours.
Government cites global factors behind price volatility
Sharif attributed the volatility in fuel prices to developments in global energy markets, particularly tensions in the Gulf region. Disruptions in petroleum supply, including the closure of the Strait of Hormuz and ongoing conflict in West Asia, have led to sharp increases in international oil prices, reported PTI.
He stated that the government had initially tried to absorb some of the impact by providing subsidies worth billions over recent weeks, delaying price adjustments despite rising global costs.
Relief measures announced for vulnerable groups
Alongside the price cut, the government introduced a set of targeted relief measures aimed at easing the burden on lower-income groups and key sectors. Motorcycle users will receive a subsidy of PKR 100 per litre, while goods transport vehicles are set to receive financial assistance ranging from PKR 70,000 to PKR 80,000, reported PTI.
Passenger transport operators will be provided support of up to PKR 100,000, and small farmers will receive assistance of PKR 1,500 per acre. Additionally, the government has decided not to increase economy-class fares for Pakistan Railways, offering further relief to daily commuters, reported PTI.
Austerity steps extended as economic pressures persist
In a bid to manage the fiscal strain, Sharif announced stricter austerity measures within the government. Federal cabinet members, who had earlier agreed to forgo salaries for two months, will now not receive salaries for six months.
The prime minister acknowledged the financial challenges faced by citizens and reiterated that the government would continue efforts to stabilise prices and support the economy. He added that the relief measures would also extend to regions such as Pakistan-administered Kashmir and Gilgit-Baltistan, with full financial backing from the federal government.
The latest developments highlight the delicate balance authorities are attempting to maintain between managing fiscal constraints and addressing public concerns amid a volatile global energy environment.
(With inputs from PTI)