According to the Finance Ministry, the decision has been taken due to the increase in oil prices in the international market.

The Finance Division said that the price of petrol will go up by Rs26.02 per litre, and the price of high-speed diesel (HSD) by Rs17.34 per litre. Now, the price for one litre of petrol will be Rs331.38, and HSD price will be Rs329.18.

This is the second time within a month that prices of petroleum products have been increased to take them to a historic high.

On September 1, the caretaker government had jacked up the petrol and diesel prices by over Rs14.

The Finance Division said the hike was due to the “increasing trend of petroleum prices in the international market and exchange rate variations”.

Back then the price of petrol went up by Rs14.91 per litre, and the price of high-speed diesel (HSD) by Rs18.44 per litre.

Today's hike in petrol prices was expected due to the rise in global oil prices.

“The rupee appreciation will have a positive impact on the petroleum prices, but it will not be enough to offset the impact of rising global oil prices,” an industry official told to private news channel.

According to an internatioanl news agency, Oil prices hit a 10-month high on Friday and were set to post a third weekly gain as supply tightness spearheaded by Saudi Arabian production cuts combined with optimism around Chinese demand to lift crude.

By 12:15pm EDT (1615 GMT), US West Texas Intermediate futures were up 62 cents, or 0.7%, to $90.78 a barrel and Brent crude futures were up 21 cents, or 0.2%, to $93.91 a barrel. Both benchmarks hit their highest since November 2022 earlier in the session, and are up about 4% for the week.

The government reviews and adjusts the petroleum prices every fortnight, based on Ogra’s recommendations. The final decision, however, rests with the finance ministry, which sometimes absorbs part of the increase to provide relief to consumers.

But the government has to raise fuel prices as agreed with the International Monetary Fund (IMF) under a $3 billion standby agreement

According to the Exchange Companies Association of Pakistan (ECAP), the rupee recovered to 298 against greenback after gaining 3 in the open market.

Raids on black market operators began earlier this month after the rupee plunged to a record low of Rs333.7 on September 5.

The army-backed campaign came after dealers requested Chief of Army Staff (COAS) Gen Asim Munir to take action to curb the rocketing dollar.

As a result of the campaign, the Pakistani currency recovered to below 300 per dollar in the open market earlier this week and tens of millions of dollars have poured back into the country's interbank and open markets, dealers say.

At a meeting last week with officials, including heads of law enforcement and security agencies, ECAP Chairman Malik Bostan and colleagues said the matter needed to be urgently escalated to General Munir.

"The army chief took notice, and the restoration of supply in the open market is credited to him," Bostan told an international news agency.

"A task force was made that is now cracking down on the illegal market."

A security official, who requested anonymity, hailed the success of the crackdown.

"The reason is the initiation and enforcement of administrative measures against hoarders, black marketeers and smugglers of dollars," the official told Reuters on condition of anonymity. "The government has issued strict orders against unauthorised money changers and other mafias."

For the past week, the hundreds of currency shops in the usually bustling lanes of Peshawar's Chowk Yadgar bazaar have been closed.

"A few days ago, some people, believed to be law enforcement officials, came here and arrested senior members of this market and put them in their vehicles with tinted glasses and drove them away to an unknown location," said Haji Luqman Khan, an aged trader, told an international news agency.

Controlling the open market rate is critical for Pakistan following the $3 billion bailout from the International Monetary Fund (IMF) that was agreed in July to help avert a sovereign default.

An IMF demand that the difference between the interbank and open market does not exceed 1.25% will be a key part of discussions set to begin later this month, before the release of the next tranche of the bailout.

Giving an indication of the scale of the problem posed by the parallel markets, Sheikh Allauddin, the president ECAP, reckoned annual transactions in the black market were roughly $5 billion, compared to $7 billion in the regulated open market.

According to media reports, the Oil and Gas Regulatory Authority (Ogra) is expected to announce new prices for petrol, diesel and other petroleum products on September 15, based on the average international crude oil prices and exchange rate fluctuations in the first 15 days of September.

The petrol price may jump by Rs16 per litre in the next fortnight review of the petroleum prices, while the price of high-speed diesel (HSD) is likely to go up by Rs13.66 per litre, industry estimates showed.

The ex-depot price of petrol has been calculated at Rs321.35 per litre for the next fortnight compared to its existing price of Rs305.36 per litre, showing an increase of Rs15.99, while the ex-depot price of HSD has been worked out at Rs325.50 per litre compared to its current price of Rs311.84 per litre, indicating an increase of Rs13.66 per litre.

The prices of kerosene and light diesel oil (LDO) are also expected to rise by Rs10.02 and Rs4.45 per litre respectively.

The increase in the ex-depot price has been mainly caused by the rupee depreciation as well as the increase in the international prices of petroleum products.

The oil industry has worked the ex-depot price of petroleum products for the next fortnight at the average exchange rate of Rs304.21 versus one dollar compared to Rs299.77 per dollar average exchange rate for the existing price of petroleum products in the country.

At 10:15am, the rupee was hovering at 299, an increase of Rs1.16, in the inter-bank market.

On Monday, the rupee had strengthened 0.59% to settle at 301.16 in the inter-bank market.

In a related development, inflows of home remittances posted a decline of 22% during the first two months of this fiscal year (FY24), the State Bank of Pakistan (SBP) reported on Monday.

According to the SBP, Pakistan received workers’ remittances amounting to $ 4.12 billion in July-Aug of FY24 compared to $ 5.25 billion in the same period of last fiscal year (FY23), a massive decline of 21.6 percent or $ 1.13 billion.

Internationally, the US dollar regained some lost ground during trading on Tuesday.

US inflation data for the month of August is due on Wednesday, with traders on the lookout for whether the world’s largest economy is indeed on track for a “soft landing” and whether the Fed has further to go in raising rates.

The US dollar index, which ended last week with an eight-week winning streak, rose 0.03% to 104.60, after falling 0.46% in the previous session. Sterling steadied at $1.2508.

The Federal Secretary in the Ministry of Energy Pakistan, Rashid Langrial, commented on the ongoing operation against electricity theft, stating that the crackdown has begun and this is just the beginning.

He emphasized that this ruthless crime will not go unpunished.

Langrial revealed that so far, over 2 million units of stolen electricity have been identified in more than 2,000 cases of electricity theft.

In connection with these allegations, 21 individuals have been arrested, and fines totaling over 160 million rupees have been imposed.

The Secretary of Energy further stated that a sum of 1 million rupees has already been collected in relation to electricity theft cases.

Speaking to a private news channel, Caretaker Energy Minister Muhammad Ali said that proposals for relief in electricity bills have been sent to the International Monetary Fund (IMF), it is hoped that a decision will be taken on the matter by Monday.

Energy Minister stated: “Gas prices will have to be increased across the country as losses of Rs350 billion have to be recovered in the gas sector”.

The federal minister added that electricity bill of September will be less compared to August. If there is no crackdown against electricity thieves, then burden will increase for those who are paying the bill.

On the other hand, caretaker Commerce Minister Gohar Ijaz said there is ample stock of sugar in the country. There is no crisis, the main reason for the inflation is the supply chain being affected.

It is pertinent to note that a large-scale crackdown has been launched against electricity and gas thieves across the country and recovery is also being done by registering cases against electricity and gas thieves.

The sources said that the government had once again made contact with the IMF recently. However, the latter rejected the government’s proposal for relief for consumers using up to 400 units of electricity.

The Fund did approve some relief for people using up to 200 units of electricity and said that consumers in the bracket should be allowed to pay their bills in installments.

The measure is expected to bring relief to around four million consumers across the country. Government sources said that the approval of the 400 unit proposal would have increased the number of people receiving relief to 32 million.

However, the IMF has pressed the government to crack down on electricity theft and improve bill recoveries. The Fund has also asked the government to increase gas tariff by 45 to 50 percent. However, the increase is linked to cabinet approval.

The government has been scrambling to find solutions after protests erupted across the country against high electricity bills. However, the government has had to walk a tightrope between providing relief to consumers while staying in the confines of an IMF program which was signed after much effort by the previous government.

The IMF had rejected the government’s initial proposal saying that it would cause a loss of around Rs 15 billion in revenue. The government had claimed that no more than Rs 6 billion would be lost.

It is important to remember that dollar closed at Rs323 rupees yesterday after falling by Rs5 in open market. Today, the US dollar has depreciated by Rs7 to settle at Rs316 in the open market.

Speaking to a private news channel, Chairman Exchange Companies Association Malik Bostan said that black market operatives used to stop our clients on the way and offer higher rates than us due to which our supply was affected.

Malik Bostan also stated that due to the crackdown, the dollar had reached at Rs317 of Rs318 in the open market today which will decrease further.

The new price of petrol will be Rs305.36 per litre after increment.

Similarly, the price of high speed diesel has been increased by Rs18.44 after which its price will be Rs311.84.

The rates of light speed diesel and kerosene oil remain unchanged. These rates will be revised on September 15.

Notably, several fuel stations across the country were shut down a couple of hours before anticipated hike.

The surge in fuel prices has compounded the misery of people already struggling with runaway inflation.

It would mean higher transportation costs, increased inflation, reduced economic activity and impact on the poor and vulnerable.

According to media report, the development comes after the caretaker government decided to seek the lender's nod before announcing any relief to the consumers.

A meeting of the federal cabinet was held on Tuesday with interim Prime Minister Anwaarul Haq Kakar in the chair to mull options but ended without announcing any measures.

The Power Division shared its proposals with the authorities but due to strict IMF loan conditions, it was concluded that the lender should be taken on board first.

Islamabad had signed a $3 billion loan agreement with the Fund in July and agreed to stringent financial discipline during the programme.

Under the bailout package, the previous government of the Pakistan Democratic Movement okayed a massive increase in electricity rates which are now being reflected in the bills.

As per the cabinet instructions, Finance Minister Shamshad Akhtar held a virtual meeting with IMF representative Esther Perez and discussed relief measures, report said.

They were briefed on the current situation as protests continue unabated across the country.

The Pakistani team submitted various proposals for relief in electricity bills but the IMF officials sought the relief plan in writing which would be shared with them today, report added.

The American currency shattered records further as it opened the new trading session on Wednesday morning with a surge of 70 paisas in the interbank market.

It traded at a record value of Rs303.75 against the local currency.

However, a short while later, the value of the rupee slumped by 95 paisas against the mighty greenback, and it reached the record value of Rs304 in interbank trading, according to currency dealers.

On Tuesday also the dollar’s relentless surge against the Pakistani rupee showed no signs of abating, reaching record highs in both the interbank and open markets on the second day of the business week.

The value of the dollar surged to an all-time high of Rs303 in the interbank market. In the open market also, the dollar traded at a historic level of Rs316.

Details reveal the imminent prospect of a rise in electricity rates by Rs 2.7 per unit. The National Electric Power Regulatory Authority (Nepra) is scheduled to deliberate on the plea from distribution companies (discos) for a price increase based on fuel price adjustments.

For government-run distribution entities, this hike is anticipated as a monthly fuel price adjustment. If sanctioned, consumers could face an additional financial strain of Rs 35 billion.

Notably, public outcry against exorbitant electricity bills has surged nationwide, prompting protests in both major cities and smaller towns. Demonstrators in Lahore, Karachi, Peshawar, and Quetta have been resorting to symbolic acts of resistance by burning their electricity bills.

Simultaneously, the business community has announced a potential countrywide shutter-down strike in the event that electricity bills remain untouched without any reduction. This stance reflects the escalating frustration among citizens and business entities regarding the mounting financial pressure due to high energy costs.

This plan will be implemented after the approval of the federal cabinet.

Under the plan, a national gas price will be set for the entire country, based on the weighted average cost of gas. This will mean that all consumers, regardless of where they live, will pay the same price for gas.

The current price of local gas is $8 per mmbtu, while the price of imported LNG is $13 per mmbtu. The plan aims to close the gap between these two prices, which is currently $5. This will help to reduce the revolving debt of the gas sector.

The plan also includes measures to reduce the amount of LNG that is used for fertilizer production. Currently, fertilizer producers are given a discounted rate for LNG. The plan would require them to pay the full market price for LNG.

The implementation of this plan will begin with the approval of the federal cabinet and consultation with the provinces.

The plan is expected to be implemented in the coming months. It is likely to have a significant impact on gas consumers, who will see their bills go up. However, the government believes that the plan is necessary to reduce the revolving debt of the gas sector and ensure the long-term sustainability of the industry.

According to details, the dollar’s value climbed by an additional 75 paisas in the interbank market, settling at an alarming 302.75 rupees.

In the open market, the dollar remains at a historic level of Rs316.

Within a mere two weeks, the US dollar has appreciated by a staggering 13 rupees in the interbank market and 20 rupees in the open market.

On Monday, the rupee concluded the day at an all-time low against the US dollar, closing at 302.

Cross-border transportation of goods has for the first time started under the United Nations International Road Transport Convention in collaboration with National Logistics Corporation of Pakistan and CEVA Logistics, a well-known Chinese company.

This important development took place on the occasion of the 10 anniversary of the China-Pakistan Economic Corridor project.

A ceremony was held at Kashgar Yuanfang International Logistics Port Company for the official launch of the TIR service. The ceremony was attended by the representatives of NLC, Kashgar Customs, Municipal Committee officials, CEVA Logistics and Cross-Border E-Commerce Association.

The speakers highlighted the importance of the TIR transport route from Kashgar to Islamabad and shed light on the future plans for transportation of goods under the TIR between the two countries.

The project will provide an efficient and safe land route to connect the landlocked Central Asian states.

Thanks to simplified and coordinated customs procedures at the borders, the cross-border movement of TIR goods will be possible faster and more safely.

This will not only reduce time, but also cost. At the end of the ceremony, the first convoy of cargo trucks left for Pakistan.

At the start of trading on Thursday, the greenback gained a further 36 paisas and reached the historic Rs300 milestone in the interbank market also.

In the open market, the US currency had crossed a triple century a few days ago already.

In just two weeks, the dollar has gained a magnanimous Rs13 in the interbank market.

On Wednesday, the US dollar had maintained its historic high rate in the Pakistani currency market. Wednesday’s trading session had opened with a further rise in the mighty currency.

Currency dealers said the dollar returned after marking a triple century.