Government raises kerosene price by Rs40 per litre, maintains petrol and diesel rates

ISLAMABAD: The federal government has increased the price of kerosene oil by Rs40 per litre, while keeping the prices of petrol and high-speed diesel (HSD) unchanged for the week ending March 20.

According to formal orders issued by the petroleum division of the energy ministry, the prime minister approved the decision to maintain the prices of petrol and HSD at their current levels. To offset the cost, the government has sanctioned a Rs23 billion price differential subsidy for oil marketing companies (OMCs). This subsidy is intended to cover the gap that would have otherwise resulted in significant price hikes for both petrol and HSD.

Without the subsidy, petrol and HSD prices would have risen by more than Rs49 and Rs75 per litre, respectively, starting March 14. The government will now pay a price differential of Rs75.05 per litre to the OMCs to keep these prices stable.

With the latest price adjustment, kerosene—often referred to as the 'poor man’s fuel'—has become the most expensive consumer fuel product, now retailing at Rs358 per litre. This marks a 12.6 percent increase in the price of kerosene as of March 14, and brings the cumulative increase to 90 percent since the start of the month, when it was priced at Rs188.87 per litre.

Kerosene has experienced the steepest price hike among all fuel products since March 7. The government’s decision to increase only the kerosene price comes amid efforts to shield consumers from even sharper rises in petrol and diesel rates, which would have placed additional financial strain on households and businesses.

The price changes and subsidy measures are part of the government’s ongoing response to fluctuations in global oil markets and domestic fiscal pressures. The official notification outlines that the subsidy will be used to pay OMCs, ensuring the continued supply of petrol and HSD at the current rates for the coming week.