Petrol Price

ISLAMABAD:  Against the backdrop of persistent economic difficulties, encompassing a sharp rise in inflation, the devaluation of the rupee against the dollar, elevated utility expenses, and a relentless upswing in the prices of vital goods, Pakistan is teetering on the verge of yet another considerable economic setback. The country is gearing up for a substantial hike in petrol prices, with projections indicating that they could soar by as much as Rs 26.03 per litre, commencing on September 16th.

Fuel Type Petrol (MS)
Petrol Price 01 September 2023 306(PKR)
Fluctuations Increase by PKR +26.02
Petrol Price from 15 September 2023 Rs.331.38/Ltr

Fuel Prices 

Rs.331.38/Ltr · Rs.331.38/Ltr · Rs.331.38/Ltr · Rs.331.38/Ltr · 

Petrol Price in Pakistan Rs 26.02

The interim government had recently given the green light for price increases in petrol and diesel, pushing petrol prices to exceed the unprecedented Rs300 per litre mark for the first time in the nation’s history.

This imminent hike will burden the populace more, as the ex-depot price is slated to climb from Rs305.36 to

Rs 331.38 per litre.

High-Speed Diesel

As per estimates provided by the oil sector, the forthcoming fortnight in September is expected to witness substantial price increases. Petrol Price is anticipated to see a significant surge of Rs15.99 per litre, high-speed diesel (HSD) may climb by Rs13.66 per litre, kerosene oil could see an increase of Rs8.79 per litre, and light diesel oil (LDO) might experience a rise of Rs4.45 per litre.

Readmore  Petrol Price in Pakistan September 2023

Current Government Taxes

These projections are based on the current government taxes imposed on petroleum products, which encompass a petroleum levy (PL) set at Rs55 per litre for Petrol Price and Rs50 per litre for HSD—a measure by the conditions set forth by the International Monetary Fund (IMF).

Petroleum Levy Rate

Furthermore, the interim government is considering raising the petroleum levy rate to Rs60 per litre for diesel, aligning with its obligations to the IMF. The government also imposes a Rs60 per litre petroleum levy on the High-Octane Blending Component (HOBC). In August, the government accumulated a substantial sum of Rs75 billion from petroleum levy charges on oil consumers, and similar collections are expected for September.

High-Speed Diesel (HSD)

If this proposed increase is sanctioned, the cost of High-Speed Diesel (HSD) could rise from Rs311.84 per litre to Rs325.50 per litre.Diesel plays a pivotal role in both the transportation and agriculture sectors. Consequently, any additional rise in its price is poised to have a substantial inflationary effect.

Light Diesel Oil (LDO)

The potential increase in the price of kerosene oil may result in a hike from the current Rs233.52 per litre to Rs243.54 per litre. Kerosene holds significance for cooking in remote regions, particularly in northern parts of the country where LPG is not readily accessible for cooking purposes. The Pakistan Army also relies on kerosene in these areas.

Pakistan State Oil (PSO)

The cost of Light Diesel Oil (LDO), primarily utilized in industries, could increase from Rs210.13 per litre to Rs218.92 per litre. The rupee’s depreciation by Rs4.45 against the dollar has had a noticeable impact on oil prices, further contributing to these potential adjustments.

The government is contemplating granting Pakistan State Oil (PSO) the authority to make a Rs3 per litre exchange rate adjustment for Petrol Price  and High-Speed Diesel (HSD).

Saudi Arabia and Russia

This move would mark another round of increases in Petrol Price for the latter part of September, driven by the ongoing surge in global commodity prices.

Brent futures, a key international benchmark, maintained a price range close to $92.14 per barrel. In a recent development, Saudi Arabia and Russia jointly decided to prolong voluntary production cuts, totalling 1.3 million barrels per day, until the year’s conclusion.

Petroleum Products

Those involved in the industry anticipate a potential decrease in the exchange rate, particularly as the dollar has experienced a decline in the interbank market.

Moreover, there is an expectation of further depreciation in the remaining two days before the official price announcement, which could offer some relief in the prices of Petrol Price products for consumers.

Global Petroleum Prices

Nonetheless, it is worth noting that significant relief may not be on the horizon for consumers due to the global upswing in petroleum product prices, which is likely to adversely affect local consumers in the form of elevated petroleum product costs.

Oil and Gas Regulatory Authority (OGRA)

An industry official pointed out, “While the appreciation of the rupee will positively impact petrol prices, it may not suffice to counterbalance the repercussions of increasing global oil prices.”

The government’s routine practice involves reviewing and adjusting petrol prices every two weeks based on recommendations from the Oil and Gas Regulatory Authority (OGRA). The ultimate decision, however, lies with the finance ministry, which sometimes absorbs a portion of the price hike to alleviate the burden on consumers.

Nevertheless, the government must raise fuel prices as part of its commitment under the $3 billion standby agreement with the International Monetary Fund (IMF).

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