Just hours after announcing a new mechanism to revise petroleum prices on a daily basis, the federal government on Friday increased the prices of petrol and high-speed diesel (HSD) by Rs5.44 and Rs31.05 per litre, respectively, citing fluctuations in international oil markets following the recent escalation between the United States and Iran.

According to a statement issued by the Petroleum Division, the price of petrol has been increased to Rs316.15 per litre, while HSD will now cost Rs354.35 per litre. 

The revised prices will take effect from midnight on Friday and remain in effect until Monday, July 20, 2026.

Read: Govt announces daily petroleum pricing to enhance transparency

Earlier, Petroleum Minister Ali Pervaiz Malik, alongside Information Minister Ataullah Tarar, unveiled a new mechanism for determining petroleum prices on a daily basis, citing renewed regional tensions that have pushed international oil prices to a one-month high.

Addressing a press conference, Malik said the move was aimed at enhancing transparency in the pricing mechanism without exposing the state to financial risks.

He said the government had introduced the new mechanism in response to sharp fluctuations in international oil markets, where prices had once again begun to rise.

Malik acknowledged that the latest decision would be difficult for the public but said it was necessary to strengthen the state.

Before the introduction of the new mechanism, the government had been revising fuel prices on a weekly basis since early March following the outbreak of the conflict between the United States and Iran. Prior to that, petroleum prices were revised on a fortnightly basis.

International oil prices surged on Friday after the United States and Iran intensified attacks across the Gulf, raising concerns over shipping disruptions due to the potential closure of the Red Sea in addition to restricted traffic through the Strait of Hormuz.

Brent crude futures rose $3.98, or 4.73 per cent, to $88.21 a barrel by 2:16pm ET (1816 GMT), while US West Texas Intermediate crude futures gained $3.80, or 4.81pc, to $82.75 a barrel.

Also Read: Oil prices jump over 2% on geopolitical fears

For the week, both benchmarks were on course to post gains of about 16pc, with Brent set for a third consecutive weekly increase and WTI on track for its second.

The Middle East is ​a major diesel exporter, and the Hormuz closure, as well as attacks on oil refineries, has tightened fuel ​markets and bolstered prices globally.

The collapsed truce between the US and Iran has resulted in a sharp decline in oil flows in the strait as Iran targets vessels transiting through it. Before the Iran war, about 20% of the global oil supplies flowed through ​the waterway.

The two foes expanded fighting on Friday, with the US striking bridges and an airport in Iran ​and Tehran hitting a power and desalination plant in Kuwait. Iran said it launched more strikes on US facilities in the ‌Middle East, ⁠including the first direct attack in Syria, after a sixth straight night of US strikes on Iranian military facilities.