LAHORE (Web Desk) – The federal government has announced a slight reduction in petrol and high-speed diesel (HSD) prices, while a sharp increase in regasified liquefied natural gas (RLNG) rates has raised concerns over higher power generation costs and inflationary pressures.
According to the latest notification, petrol prices have been reduced by 12 paisas per litre, bringing the new price to Rs336.03 per litre. The price of high-speed diesel has decreased by 66 paisas and will now be available at Rs392.38 per litre.
The revised fuel prices will remain applicable from August 1 to August 3. The government continues to collect Rs110 per litre in taxes and duties on petrol and Rs96 per litre on diesel.
However, the minor relief in petroleum prices has been overshadowed by a record increase in RLNG prices announced by the Oil and Gas Regulatory Authority (Ogra).
Record RLNG increase raises power cost concerns
Ogra has increased RLNG prices by around 32 percent for August, taking the rate to $25.83 per million British thermal units (mmBtu) for Sui Northern Gas Pipelines Limited (SNGPL) and $25.09 per mmBtu for Sui Southern Gas Company Limited (SSGCL).
The new rates translate into an estimated retail price of Rs7,204 per mmBtu, marking the highest-ever increase in RLNG prices during the last decade.
The increase is linked to reliance on expensive spot-market LNG cargoes after Pakistan could not secure a shipment from Qatar due to disruptions caused by the ongoing US-Iran conflict.
Impact on electricity generation
The surge in RLNG prices is expected to increase fuel costs for power generation, potentially adding pressure on electricity tariffs.
Data shows that fuel costs for RLNG-based power generation increased significantly, rising to Rs31 per unit in May compared with Rs13.72 per unit in April.
Energy analysts believe higher gas costs could further affect industrial production, electricity prices and overall inflation.
Fuel prices affected by Middle East tensions
Petroleum prices had witnessed a sharp rise after tensions between the United States and Iran escalated in February.
Diesel prices had climbed to a record Rs520.35 per litre on April 3 after starting from around Rs281 per litre. Petrol prices also reached a peak of Rs458.41 per litre during the same period.
The government had earlier shifted from weekly fuel price adjustments to daily pricing due to volatility in global oil markets and concerns over possible supply disruptions.
Economic impact on consumers
Petrol is mainly used by private vehicles, motorcycles, rickshaws and small transport, directly affecting middle and lower-middle-income households.
Diesel prices have a wider impact as the fuel is heavily used in freight transport, agriculture, industrial machinery, power generation and large generators.
While the latest reduction provides limited relief, the sharp rise in RLNG prices may continue to create challenges for consumers, businesses and the power sector.
