Petrol Price India Vs Pakistan: Why Fuel Is Cheaper In India Than Pak Despite Global Crisis

Even as global oil markets reel under the impact of the ongoing West Asia conflict, a stark contrast has emerged between Pakistan and India in how the two neighbours are handling fuel prices and the difference is hitting consumers hard across the border.

Pakistan Hikes Petrol & Diesel Prices

Pakistan on Thursday announced a massive hike in fuel prices, pushing petrol to Rs 458.4 per litre and high-speed diesel to a staggering Rs 520.35 per litre. The increase-over Rs 137 per litre for petrol and Rs 184 per litre for diesel comes as Islamabad struggles to cope with soaring international crude prices triggered by the ongoing conflict involving the United States, Israel, and Iran.

Ironically, Pakistan's geographical proximity to Iran and its attempts to position itself as a mediator in the Middle East crisis have offered little economic cushion. Despite being closer to key oil-producing regions, the country finds itself deeply exposed to global volatility, with the government forced to pass on the burden directly to consumers.

Officials in Pakistan have attributed the sharp hike to unprecedented pressure in global energy markets. Petroleum Minister Ali Pervaiz Malik described the situation as a crisis that has "engulfed not just the region but the entire world," while also highlighting that earlier recommendations for price hikes were initially rejected by the government before the situation worsened.

In contrast, India has managed to maintain remarkable price stability. As of April 3, petrol and diesel prices across major Indian cities remain unchanged, continuing a trend that has held steady since May 2022 following tax cuts by the central and state governments.

Here's how fuel prices currently stand in key Indian cities:

Last week, the Narendra Modi-led BJP government slashed special additional excise duties for petrol and diesel by Rs 10 per litre each, bringing the taxes down to Rs 3 per litre of petrol and making it zero for diesel. It will impact the government's revenue (approximately ₹1.6 lakh crore to ₹1.8 lakh crore for the central government).

While global crude prices continue to fluctuate sharply, Indian oil marketing companies and the government have absorbed a portion of the volatility, preventing sudden shocks to consumers. The daily price revision system, introduced to ensure transparency, has not translated into frequent hikes, thanks to calibrated policy decisions and fiscal buffers.

The divergence highlights a broader difference in economic resilience and policy execution. While Pakistan is grappling with fiscal stress and external vulnerabilities, India's relatively stable macroeconomic framework has allowed it to shield its citizens from extreme price swings, even during periods of global uncertainty.

At a time when fuel prices can heavily impact household budgets, the contrast showcases how strategic policy choices and economic preparedness can make all the difference, at least for now.