The federal government on Monday increased the price of petrol by Rs9.99 per litre and high-speed diesel (HSD) by Rs6.18 per litre for the next fortnight.
A notification from the Finance Division stated that the new petrol price is Rs275.6 per litre, while HSD is now Rs283.63 per litre, due to price variations in the international market.
It clarified that there would be no change in the applicable duties and taxes, which will remain at their current levels.
Prices of the two petroleum products were anticipated to rise by more than Rs7.60 and Rs3.50 due to higher global oil prices.
Sources indicated that petrol and HSD prices in the international market had increased by approximately $4.4 and $2 per barrel, respectively, over the past fortnight.
The government has raised the maximum limit of the petroleum development levy (PDL) to Rs70 per litre in the Finance Bill, aiming to collect Rs1.28 trillion in the current fiscal year, compared to Rs960 billion collected during the previous year. This represents an increase of almost Rs91 billion from the Rs869 billion budget target.
During the current fortnight, import premiums on both petrol and HSD have remained unchanged at $9.60 and $6.50 per barrel, respectively. Meanwhile, the rupee depreciated by about 17 paise against the dollar during this period.
The government currently charges about Rs77 per litre in taxes on both petrol and HSD. Although the general sales tax is zero on all petroleum products, the government imposes a Rs60 per litre PDL on both products, impacting the masses. Additionally, the government levies about Rs17 customs duty on a litre of petrol and HSD, regardless of local production or imports.
Petroleum and electricity prices have been significant drivers of high inflation. Petrol is primarily used in private transport, small vehicles, rickshaws, and two-wheelers.
In contrast, an increase in diesel prices is considered highly inflationary as it is mainly used in heavy transport vehicles, significantly affecting the prices of vegetables and other essential goods.
