In a recent development affecting everyday consumers, the government of Pakistan has announced a significant increase in the price of kerosene oil, raising it by Rs39.20 per litre. This adjustment comes into effect for the week ending March 20, while petrol and diesel prices remain unchanged. Kerosene, often referred to as the fuel of the economically disadvantaged, has now become the most expensive fuel product available, reaching a price of Rs358 per litre. This marks the steepest price hike among all petroleum products since the previous revision on March 7.
The Ministry of Energy has revealed that despite the global surge in oil prices, the government has decided to maintain petrol prices at their current level by absorbing the additional costs through a substantial subsidy. To this end, the government is set to disburse Rs23 billion as a price differential subsidy to oil marketing companies (OMCs). This financial support is intended to shield consumers from the direct impact of international market fluctuations, ensuring petrol remains affordable for the time being.
the official notification, the levy imposed on petrol will continue to stand at Rs105.37 per litre, while the diesel levy remains fixed at Rs55.24 per litre. The subsidy arrangement covers the period from March 14 to March 20, during which the government will provide Rs49.63 per litre subsidy on petrol and Rs75.05 per litre on diesel. These payments are scheduled to be processed through the Oil and Gas Regulatory Authority (OGRA), which will also be responsible for verifying and auditing the invoices submitted by the oil marketing companies to ensure transparency and accountability.
In a related move, the federal cabinet has given its approval for the creation of the Prime Minister’s Austerity Fund, a financial mechanism aimed at supporting government austerity measures and managing subsidies more effectively. The Economic Coordination Committee (ECC) has authorized the transfer of Rs27.1 billion into this fund, of which Rs23 billion is earmarked specifically for OGRA to facilitate the ongoing fuel subsidy payments. This strategic allocation highlights the government’s commitment to balancing fiscal discipline with consumer protection amid challenging economic conditions.
It is important to note that kerosene oil, widely used for cooking and heating in low-income households, has experienced the most pronounced price increase, which may put additional financial pressure on vulnerable segments of the population. Meanwhile, the decision to keep petrol and diesel prices steady reflects the government’s cautious approach to managing inflationary pressures and maintaining stability in the transport and logistics sectors. As the global energy market remains volatile, these measures underscore the complexities faced by policymakers in navigating domestic economic priorities alongside external market dynamics.
