The government has announced a substantial increase in petrol prices by Rs13.55 per litre for the fortnight starting February 1-15.
The move was aimed at covering elevated taxes for current expenditures and addressing the surge in global oil prices, also saw the price of high-speed diesel (HSD) rise by Rs2.75 per litre.
According to the finance ministry, petrol is now priced at Rs272.89 per litre, up from Rs259.34, and diesel at Rs278.96 per litre, up from Rs276.21. Petrol.
Petrol is widely used in motorbikes and cars, while diesel, crucial for the transport and agriculture sectors, is also integral to the daily lives of consumers.
Fluctuations in the price of High-Speed Diesel (HSD) directly impact consumers, leading to inflationary pressures.
With gas load-shedding affecting the CNG sector in February, petrol, often considered an alternative, is expected to witness high demand.
In Punjab, where no indigenous gas has been available for the CNG sector for several years, the entire CNG sector relies on imported gas. CNG outlets in other provinces are also facing load-shedding due to gas shortages in the country.
“The government of Pakistan has decided to bring changes in the current prices of petroleum products during the fortnight starting from 1st February 2024, as recommended by the Oil and Gas Regulatory Authority (OGRA),” stated the finance ministry.
Pakistan, being a net importer of petroleum products, experiences the impact of import premiums on oil prices. The import premium on petrol is estimated at $9.47 per barrel, while the premium on HSD is projected to increase to $6.50 per barrel from $5.30 per barrel.
Internationally, the price of Brent had risen by $5 per barrel to $83 from $78 per barrel on January 16. HSD has also become costlier by about $2 per barrel to $97 from about $95 per barrel during the same period.
Currently, the government is imposing a higher rate of petroleum levy on petroleum products, up to Rs60 per litre. Hence, the key reason for higher oil prices in Pakistan is the higher taxes collected by the federal government to meet current expenditures.
