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Following our previous news where we mentioned that the petrol price was going to rise, there’s another major development now. The government has decided to freeze any immediate increase in petroleum prices.

As a result, petrol and diesel prices will remain unchanged this weekend, with no hikes expected for the coming weeks.

To prevent fuel prices from going up, the government plans to use a Rs 389 billion ’emergency fund’. This money will cover the additional fuel costs, so the public does not have to pay more right now.

Prior to this decision, our estimate from yesterday indicated that diesel and petrol prices were set to increase by Rs. 20- 30 this weekend.

Read More: Govt Cuts Motorway and Highway Speed Limits to Save Fuel

A well-placed source told DAWN that Prime Minister Shehbaz Sharif and the military leadership have jointly decided to stop any further price hikes in the near future. This promise holds true no matter how much prices rise in the Middle East.

The Prime Minister told his team that the current fuel supply issues are a huge emergency for the nation. Because of this, the government must use its emergency funds to help the citizens right away.

Some cabinet members and financial experts, especially those dealing with the International Monetary Fund (IMF), do not want to use the emergency funds.

They also defended the recent March 7 price increase of Rs 55 per litre for diesel and petrol, explaining that it was necessary to prevent petrol shortages like those seen in neighboring countries.

However, government ministers stress that protecting the public is their top priority.

The government has also banned the export of all petroleum products. Local oil refineries have been told not to sell furnace oil and naphtha to other countries.

This step was taken to save fuel for making electricity. Pakistan needs this backup fuel because it has stopped receiving liquefied natural gas (LNG) from Qatar due to the country’s gas facilities recently coming under attack during the ongoing conflict in Iran.

Global Prices and Supply Challenges

Pakistan buys 95% of its oil from the Middle East. Global prices are currently very high, and Brent crude is averaging at $95-$100 per barrel . Middle East refined petrol stands at $120 per barrel and diesel at $168 per barrel.

Right now, Pakistan has enough petrol and diesel to last for 22 to 23 days. However, the government is looking at the alternative Red Sea route, and three petroleum shipments have already docked in Pakistan’s port

Besides fuel availability, another problem is shipping costs. large oil ships have also become very expensive to rent. For example, the cost of renting large oil tankers has jumped nearly 15 times due to rising ‘war premium’ insurance costs.

Other Actions by the Government

To handle the fuel crisis, the government has taken a few other important steps:

Saving Fuel for Power: Oil refineries are now banned from selling furnace oil to other countries. This fuel will be kept in Pakistan to make electricity.

Gas Rationing: After Eid al-Fitr, the government will limit gas supplies. This will help save money and reduce power cuts during the hot summer.

Border Support: Informal supplies of cooking gas (LPG) crossing the border from Iran have doubled since the war started.

Reduce Quota of Fuel: The federal government has reduced the quota of fuel usage for all government officials until the supply gets back to normal

Read More: Government to Announce Austerity Plan as Global Fuel Crisis Deepens

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