Islamabad: Pakistan’s government has announced an increase in petrol and high-speed diesel (HSD) prices for the next 15 days, effective November 1. This decision surprised many, as global oil prices have recently dropped. The Ministry of Finance confirmed the new rates in coordination with the Oil and Gas Regulatory Authority (OGRA).
New Fuel Prices
The price of petrol has gone up by Rs1.35 per liter to Rs248.38. HSD has increased by Rs3.85 per liter, bringing its price to Rs255.14. These adjustments are valid until November 15. However, prices for kerosene and light diesel have been reduced. Kerosene has dropped by Rs1.48 to Rs161.54 per liter, and light diesel has been cut by Rs2.61 to Rs147.51 per liter.
Despite lower global oil prices, OGRA’s assessment led to this hike. It considered inventory losses that oil companies faced and some previous unadjusted increases. Although international prices dropped slightly, these factors outweighed the potential decrease.
Impact of Taxes and Levies
A large part of the fuel price comes from various taxes and levies. Currently, Rs76 per liter is charged as tax on both petrol and HSD. Additionally, there is a petroleum development levy of Rs60 per liter on both products, adding to the final cost for consumers. A customs duty of Rs16 per liter is also applied on petrol and diesel, regardless of whether they are locally produced or imported.
Distribution and sale margins add another Rs17 per liter, shared between oil companies and their dealers. General sales tax (GST) on petroleum products remains at zero, which slightly offsets the high taxes.
LPG Price Adjustment
The government has also raised the price of liquefied petroleum gas (LPG). OGRA has increased LPG by Rs2.88 per kg, bringing the price of an 11.8kg cylinder to Rs2,999.47 for November. This change follows a 1.6% rise in the Saudi Aramco Contract Price (CP) and minor changes in the US dollar exchange rate.
OGRA states that LPG prices depend on the Saudi Aramco CP and dollar rate. The month-to-month adjustments result in a higher cylinder price, adding Rs34.09 to each one.
Public Reaction and Future Outlook
Oil companies are unhappy about recent inventory losses from unadjusted rates. Meanwhile, consumers bear the brunt of persistent price hikes. The finance ministry hopes that future global price drops may eventually bring relief to domestic fuel prices.
Fuel prices are an ongoing concern, and every increase affects the economy. The government’s decision to raise petrol and diesel prices is drawing significant attention and raising questions about the economic impact on the general public.
