Pakistan has declared a reduction of 80 rupees per litre in petrol prices, lowering the cost to 378 rupees per litre, as stated by Prime Minister Shehbaz Sharif on the evening of February 1, 2025. This decision comes in the wake of civil unrest triggered by a recent sharp increase in fuel prices. The government plans to manage this price reduction by making adjustments to the petroleum levy.

This announcement follows a significant price hike that had occurred merely a day earlier. Costs for petrol had surged by 42.7 per cent to reach 458.40 rupees per litre, and diesel prices increased by 54.9 per cent to 520.35 rupees per litre. The surge in prices has been attributed to escalating global oil market dynamics, particularly linked to the ongoing conflict in the Middle East.

Government Response to Public Outcry

Petroleum Minister Ali Pervaiz Malik addressed the public’s concerns, asserting that the prior increase in fuel prices was unavoidable due to the rise in international crude oil prices. “It was inevitable to raise the prices due to the international market prices going out of control after the US-Iran war,” he remarked during a joint press briefing alongside Finance Minister Muhammad Aurangzeb, aired on state television.

In the context of previous adjustments, this reduction follows another price increase last month, where the government raised petrol and diesel prices by approximately 20 per cent. This earlier hike had also been justified by the rising global prices related to the US-Israeli conflict on Iran.

The fluctuations in fuel prices have exacerbated the economic pressures faced by the populace, leading to extensive protests across Pakistan. Many citizens voiced their grievances, criticising the government for imposing abrupt price hikes that add further strain on an already beleaguered economy.

Targeted Relief Measures Introduced

In light of the widespread unrest, the government has announced specific relief initiatives aimed at alleviating the financial burden on consumers. Finance Minister Aurangzeb indicated that a subsidy of 100 rupees per litre would be available to two-wheeler users, although this subsidy is capped at 20 litres per month, effective for a duration of three months.

The government’s response aims to provide some respite to those most affected by the recent fuel price spikes. The measures signify an attempt to balance fiscal responsibility with public welfare amid the ongoing economic challenges.

Pakistan remains highly dependent on oil imports, primarily from nations such as Saudi Arabia and the UAE, through the strategic Strait of Hormuz. Consequently, the country is exceedingly susceptible to global fluctuations in the energy market, which significantly impact domestic fuel prices.

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