Despite a nearly 3 percent decline in global oil prices, the government is expected to raise petrol prices for the next two weeks starting March 1.
According to sources, the final estimate on February 28 indicates that the ex-depot price of petrol is likely to increase by between Rs4 and Rs4.50 per liter. In contrast, prices for high-speed diesel (HSD) and kerosene might experience a slight drop of less than Rs1 per liter.
This proposed rise in petrol prices comes amid a modest uptick in international oil rates and a depreciation of the rupee against the US dollar. While benchmark Brent crude prices have remained relatively stable over the past ten days, fluctuations in the exchange rate have contributed to the expected local fuel price hike.
Current Fuel Prices in Pakistan
- Ex-depot petrol is currently priced at Rs256.13 per liter, while HSD is at Rs263.95 per liter.
- Kerosene is officially priced at Rs171.65 per liter, although in many areas it sells for between Rs300 and Rs350 per liter due to supply issues.
The government collects around Rs76 per liter in taxes on both petrol and HSD, which includes a Petroleum Development Levy (PDL) of Rs60 per liter. Although the General Sales Tax (GST) remains at zero, an additional customs duty of Rs16 per liter is applied on both locally refined and imported products.
Furthermore, oil companies and dealers add a combined distribution and sales margin of Rs17 per liter on petrol and HSD. Meanwhile, light diesel oil and high-octane blending products incur a Rs50 per liter levy, a rate also applied to 95-RON petrol, which is primarily used in luxury vehicles.
Read more: Global Oil Prices Drop More Due To Demand Uncertainty
Impact on Consumers
Petrol is essential for private transport, small vehicles, motorcycles, and rickshaws, making it a critical commodity for middle- and lower-middle-class consumers. Any increase in its price directly affects household budgets, placing further strain on those already facing inflationary pressures.
High-speed diesel is crucial for the transport and agriculture sectors, as it is widely used in trucks, buses, trains, tractors, tube wells, and threshers. A rise in diesel prices typically results in higher transportation costs, which in turn can drive up the prices of essential goods such as vegetables and other food items.
Global Oil Price Trends
Global oil prices dropped by roughly 3 percent to a two-month low in New York on Tuesday amid weak economic data from the United States and Germany, fueling concerns about reduced energy demand. At 1:09 pm local time, Brent crude futures fell by $1.99 (2.7%) to $72.79 per barrel, while US West Texas Intermediate (WTI) crude declined by $1.92 (2.7%) to $68.78 per barrel. Indications from oil-producing nations suggest that production levels remain steady, which may further influence global oil prices.
