By The South Asia Times

ISLAMABAD - Pakistan has raised petrol and diesel prices again, adding to financial pressure on households already struggling with high living costs as global oil market volatility continues to hit the South Asian economy, according to daily Dawn.

The government increased the price of petrol by Rs4.42 ($0.016) per litre and high-speed diesel by Rs6.10, taking petrol to Rs380.24 ($1.36) per litre and diesel to Rs409.42 ($1.46) from Tuesday.

The latest increase is expected to have a broad impact because fuel prices directly influence transportation costs and indirectly raise the cost of food and other essential goods.

Petrol is widely used by motorcycles, rickshaws and small private vehicles, making price increases particularly painful for low- and middle-income families who depend on two-wheelers for commuting and work.

Diesel is equally important to the wider economy because it powers heavy transport, machinery, power plants and large generators. Higher diesel costs can therefore increase freight charges and push up prices across supply chains.

The government continues to collect Rs114 in taxes and duties on every litre of petrol and Rs100 on diesel, highlighting the significant contribution of petroleum products to state revenues.

Despite the latest increase, fuel prices remain well below their record levels earlier this year.

Diesel reached Rs520.35 per litre on April 3, while petrol climbed to Rs458.41 amid a sharp deterioration in global energy markets following the outbreak of the U.S.-Iran conflict on Feb. 28.

The government subsequently introduced frequent price adjustments to reflect international market movements.

Prime Minister Shehbaz Sharif announced a targeted fuel-relief scheme on Sunday aimed at cushioning the impact on poorer motorists.

Owners of motorcycles and three-wheelers are expected to receive Rs100 per litre in relief for up to 20 litres a month, while owners of vehicles with engines up to 800cc will receive the same subsidy for up to 30 litres.

However, the relief covers only a limited monthly fuel quota and may not fully offset the impact of rising transportation and commodity costs.

Pakistan also shifted to a daily fuel-pricing mechanism in July, giving the Oil and Gas Regulatory Authority responsibility for adjusting prices in line with international oil market movements.

Previously, prices had been revised weekly amid concerns over supply disruptions and volatility linked to the Middle East conflict.

With petrol and diesel accounting for the bulk of Pakistan's petroleum consumption and generating substantial government revenue, fuel prices remain a sensitive economic and political issue.

For millions of Pakistanis, however, the latest increase means higher commuting costs and the prospect of further increases in the prices of everyday necessities — putting additional pressure on already stretched household budgets.