Petrol and Diesel Prices Expected to Rise in Pakistan

From July 1, petrol and high-speed diesel (HSD) prices in Pakistan are anticipated to increase after experiencing four consecutive price reductions.

Petrol is expected to see a rise of Rs7 per litre, while HSD could increase by Rs8 per litre due to recent escalations in international market rates. Reports indicate that global prices for petrol and HSD have surged by $4.4 and $5.5 per barrel, respectively, over the past two weeks. These international trends are likely to translate into higher costs domestically, potentially exacerbated if the government opts to raise the Petroleum Development Levy (PDL) from its current Rs60 per litre.

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Since May 1, Pakistan has witnessed a decline in petrol and HSD prices due to a downturn in the global market. Petrol prices have decreased by approximately Rs35 per litre, dropping from around Rs294 at the end of April to about Rs259 presently. Similarly, HSD prices have fallen by roughly Rs22 per litre, declining from over Rs290 in mid-April to Rs268.

The Finance Bill 2024 has authorized an increase in the PDL cap to Rs80 per litre, aiming to generate Rs1.28 trillion, up from the previous fiscal year’s target of Rs960 billion. Finance Minister Muhammad Aurangzeb has indicated that adjustments to the PDL will be made gradually in response to market price fluctuations.

Petroleum and electricity costs significantly impact inflation in Pakistan, influencing prices for essential goods and affecting middle and lower-middle-class households.