On Tuesday, the federal government announced a hike in the price of petrol by Rs5.36 per litre and high-speed diesel (HSD) by Rs11.37 for the next fortnight. The new petrol price will be Rs272.15 per litre, while the price of HSD will be Rs284.35 per litre.
This increase follows recommendations made by the Oil and Gas Regulatory Authority (Ogra) and other concerned ministries, as mentioned in a press release from the Finance Division. The revised prices are set to impact the budget of households, particularly for those relying on petrol for daily transportation.
While the government did not mention any changes to the prices of kerosene or light diesel oil, informed sources indicate that the ex-depot price of petrol was expected to rise by around two percent, bringing it to Rs272.04 per litre. In contrast, the price of HSD was expected to see a 2.5% increase, reaching approximately Rs279.48 per litre.
Petrol, commonly used in motorcycles, rickshaws, and private vehicles, directly affects the finances of middle- and lower-income households. Diesel, on the other hand, powers heavy transport, agricultural machinery, and trains. The rise in diesel prices is especially inflationary, as it directly influences the cost of food and essential goods. Transporters had already started adjusting fares in anticipation of the increase.
Despite the government’s decision to maintain zero general sales tax (GST) on petroleum products, it continues to collect nearly Rs98 per litre in levies on both petrol and diesel. This includes a petroleum development levy (PDL) of Rs78.02 on petrol and Rs77.01 on diesel, along with a climate support levy (CSL) of Rs2.25 per litre. Additionally, a customs duty of Rs20-21 per litre is levied on both fuels.
Oil marketing companies and dealers are earning around Rs17 per litre as combined distribution and retail margins. The monthly sales of petrol and diesel range between 700,000 and 800,000 tonnes, in stark contrast to just 10,000 tonnes of kerosene.
In the fiscal year 2024, the government collected Rs1.161 trillion through the petroleum levy and aims to raise this figure by 27% to Rs1.470 trillion in fiscal year 2025. Despite the absence of GST, petroleum products remain a significant source of revenue for the government.
This petrol price hike reflects the growing financial pressure on the economy, impacting everything from household budgets to inflation rates.
For more updates on petrol price changes, check out our latest article on the Petrol Price Hike in Pakistan
