In a recent announcement, the federal government has increased the price of petrol by Rs9.99 per litre and high-speed diesel (HSD) by Rs6.18 per litre, effective for the next two weeks.
According to a notification from the Finance Division, the updated petrol price is now set at Rs275.6 per litre, while HSD will cost Rs283.63 per litre, attributed to fluctuations in international market prices.
The government clarified that there would be no alterations to the existing duties and taxes, which will remain unchanged. Analysts had anticipated an increase of over Rs7.60 for petrol and Rs3.50 for diesel due to rising global oil costs.
Recent data indicates that international prices for petrol and diesel have risen by approximately $4.4 and $2 per barrel, respectively, in the past fortnight.
Additionally, the government has raised the ceiling for the petroleum development levy (PDL) to Rs70 per litre as part of the Finance Bill, aiming to generate Rs1.28 trillion this fiscal year, compared to Rs960 billion in the previous year—exceeding the original budget target by nearly Rs91 billion.
During this period, import premiums for petrol and diesel have remained stable at $9.60 and $6.50 per barrel. However, the local currency has weakened by about 17 paise against the dollar.
Currently, the government imposes a tax of around Rs77 per litre on both fuels. Although there is no general sales tax on petroleum products, a PDL of Rs60 per litre is charged, affecting consumers significantly. There is also a customs duty of about Rs17 per litre on both petrol and diesel, regardless of their production status.
Rising prices of petroleum and electricity have been significant contributors to inflation. Petrol is primarily used for private transportation, including cars, rickshaws, and motorcycles. In contrast, the increase in diesel prices is particularly concerning, as it predominantly affects heavy transportation, further escalating the cost of essential goods like vegetables and other food items.
