'Good news': Govt hints at reducing petroleum prices following US-Iran deal

Federal Minister for Petroleum Ali Pervaiz Malik has said that the government is expected to announce “good news” regarding a possible reduction in petroleum product prices.

“We will bring good news regarding a reduction in petroleum prices,” the minister said while speaking with Geo News, acknowledging that the public had already faced difficulties due to regional tensions following the US-Iran conflict.

The minister’s statement comes days after US and Iranian officials agreed on a framework to end their war, which began when US and Israeli forces attacked Iran on February 28, to halt the US blockade of Iran and reopen the Strait of Hormuz, a key supply route for global oil and gas.

Tumbling crude prices on news that Iranian fuel may soon hit global markets promised inflation relief and pushed bond yields lower on Wednesday.

Brent crude futures dived below $80 to the lowest since the opening salvos of the US-Iran conflict in March.

On February 27, Brent closed at $72.48 a barrel and WTI closed at $67.02. The per-litre price of petrol currently stands at Rs373.78 in Pakistan and high-speed diesel at Rs378.78 per litre.

The decision on fuel prices will be made this coming Friday, as the government has been reviewing petroleum prices on a weekly basis since the US-Israeli conflict with Iran on February 28.

The petroleum minister told Geo News that the increase in fuel prices during the Iran war had affected household budgets in the past, but the government was committed to providing relief where possible.

“There is a promise and the prime minister’s direction that we will reduce prices to the extent possible,” Malik added.

The minister added that the availability of Iranian crude oil in global markets could help ease prices. “On this expectation, oil prices are falling in the international market,” he added.

The petroleum minister further stated that PM Shehbaz had promised that any reduction in global oil prices would be passed on to the public.

“The prime minister had assured that whenever global prices fall, the benefit will be transferred to the people,” he said.

Earlier this year, the government increased fuel prices after tensions escalated when the United States and Israel launched attacks on Iran in February, prompting Tehran to respond with retaliatory strikes and temporarily disrupt global shipping routes through the Strait of Hormuz. The developments led to a spike in international oil prices.

As global rates increased, the government raised domestic fuel prices by more than 50%. Petroleum prices were revised twice in the first week of March. The steepest hike was recorded in April.

During that month, petrol prices were raised by Rs137 per litre to a record Rs458.4 per litre. A day after, PM Shehbaz announced a reduction of Rs80 per litre in the petroleum levy, bringing the price down to Rs378 per litre.

Last month, fuel prices were again increased by Rs26.77 per litre for both petrol and high-speed diesel. A further increase came a week later, pushing prices close to Rs400 per litre. Later, the Petroleum Division issued another notification raising prices by nearly Rs15 per litre.

However, in subsequent revisions, the government has reduced petrol prices.