The government on Friday announced a slight increase in fuel prices, raising petrol by Re1 per litre and high-speed diesel (HSD) by Rs7 per litre for the next fortnight.
According to a press release from the Finance Division, the revised prices were determined based on recommendations from the Oil & Gas Regulatory Authority (Ogra), considering recent fluctuations in the international oil market. As a result, the new petrol price is Rs257.13 per litre, while HSD now costs Rs267.95 per litre. No mention was made regarding price adjustments for light diesel oil and kerosene oil.
International Market Impact on Fuel Prices
Industry sources earlier estimated that petrol prices could increase by Rs2-3 per litre, while HSD and kerosene were expected to rise by about Rs6 per litre. These predictions were based on a bullish trend in the global oil market, where Brent crude prices increased by $2 per barrel over the past two weeks.
During this period, the average international price of HSD increased by $2.50 per barrel, while petrol rose by 50 cents per barrel. Additionally, the ex-refinery cost of kerosene went up. The import premium on petrol climbed by 40 cents to $8.84 per barrel, while it remained unchanged for diesel. However, the exchange rate remained largely stable.
As per the latest pricing calculations, as of January 29, HSD and kerosene prices were expected to increase by Rs5-6 per litre, while petrol was anticipated to rise by Rs2-2.50 per litre. The ex-depot prices for petrol and HSD now stand at Rs256.13 and Rs260.95 per litre, respectively, while kerosene is officially priced at Rs169.25 per litre, though it is often sold at a higher rate in the market.
Impact of Fuel Prices on Consumers
Petrol is widely used by private transport, motorcycles, rickshaws, and small vehicles, making its price a crucial factor for middle- and lower-income groups. Meanwhile, HSD is a key fuel for the transport sector, powering heavy vehicles, buses, trucks, trains, and agricultural machinery. Its price directly influences inflation, particularly affecting the cost of vegetables, food items, and essential goods.
Taxes and Additional Charges on Fuel
The government currently imposes Rs76 per litre in taxes on both petrol and HSD. Although General Sales Tax (GST) remains zero, a Petroleum Development Levy (PDL) of Rs60 per litre is applied to both fuels, impacting consumers. Additionally, a customs duty of Rs16 per litre is charged on petrol and HSD, regardless of whether the fuel is locally produced or imported.
Furthermore, oil companies and dealers add around Rs17 per litre as distribution and sales margins, further contributing to the final retail price.
This latest fuel price adjustment underscores the continued influence of global market trends and taxation policies on domestic fuel costs, with a significant impact on inflation and household budgets across Pakistan.
